How Far will the Pound to Euro Exchange Rate Fall Next Week?
The GBP is coming under pressure against the EUR once more and questions are now being asked as to whether the currency pair could ultimately record fresh 2016 lows over coming weeks.
- * If you have imminent GBP into EUR payments be aware that sub-1.20 is possible.
- * 1.2578/1.2563 will form the focus for this exchange rate over the course of the second week of May
- * If the GBP/EUR were to be bid and climb back through 1.2740 then 1.30s become possible
The pound to euro exchange rate fell over the course of the first week of May, coming down from an opening of 1.2738 to close at 1.2647.
The move lower in pound sterling confirms the establishment of a top in the April recovery rally being formed against the euro; no doubt this is partially due to a run of poor economic data releases which confirm the UK economy is no longer growing at a rate that justifies a higher GBP/EUR conversion.
Sterling was kept under pressure as the much-anticipated services PMI out on the 5th of May came in well below expectations at 52.3, analysts had forecast 53.5.
The service sector data follows the construction PMI and manufacturing PMI - both of which disappointed market expectations.
"The PMI provided the opportunity to rebalance exchange rate levels, higher lately than would be compatible with the domestic picture, both in terms of economic data and of political uncertainty ahead of the referendum," notes Asmara Jamaleh at Intesa Sanpaolo in Milan.
The UK economy is certainly seeing its once impressive growth rate decline with much of the blame being placed on deferred investment intentions with the EU referendum taking the blame.
The good news for those who can afford to wait is that the pound should recover quite sharply alongside the economy once the mid-year uncertainty has passed.
Of course, we have a number of weeks lying ahead of us and those with imminent international payment needs will be eager to know whether we are in for further notable slides.
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The GBP is coming under pressure against the EUR once more and questions are now being asked as to whether the currency pair could ultimately record fresh 2016 lows over coming weeks.
The pound to euro exchange rate fell over the course of the first week of May, coming down from an opening of 1.2738 to close at 1.2647.
The move lower in pound sterling confirms the establishment of a top in the April recovery rally being formed against the euro; no doubt this is partially due to a run of poor economic data releases which confirm the UK economy is no longer growing at a rate that justifies a higher GBP/EUR conversion.
Sterling was kept under pressure as the much-anticipated services PMI out on the 5th of May came in well below expectations at 52.3, analysts had forecast 53.5.
The service sector data follows the construction PMI and manufacturing PMI - both of which disappointed market expectations.
"The PMI provided the opportunity to rebalance exchange rate levels, higher lately than would be compatible with the domestic picture, both in terms of economic data and of political uncertainty ahead of the referendum," notes Asmara Jamaleh at Intesa Sanpaolo in Milan.
The UK economy is certainly seeing its once impressive growth rate decline with much of the blame being placed on deferred investment intentions with the EU referendum taking the blame.
The good news for those who can afford to wait is that the pound should recover quite sharply alongside the economy once the mid-year uncertainty has passed.
Of course, we have a number of weeks lying ahead of us and those with imminent international payment needs will be eager to know whether we are in for further notable slides.
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