The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in a tight range on Monday as positive Eurozone trade balance data was cancelled out by a warning made by Germany’s Bundesbank. Worries over Greece were also weighing upon the single currency.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trading in a range of 1.3795 to 1.3878
The Euro received support from data released by the European Union statistics agency (Eurostat) which showed that the single currency regions trade surplus widened in April thanks to a fall in imports.
The data showed that the trade surplus widened to a seasonally adjusted €24.3 billion from the revised €22.9 billion seen in March. Exports meanwhile increased by a solid 1.1%, whilst imports fell by 1.6%. On an unadjusted basis, the regions trade surplus totalled €24.9 billion.
Year-on-year exports increased 9%, whilst imports rose 3%. The data also beat economist forecasts for a figure €20.6 billion
Despite the improved figure economists were cautious as the recent slide in the value of the Euro does not yet seem to have had much of a positive impact for exporters. Data released last week showed that the softer currency had little impact on overall Eurozone GDP in the first quarter of the year.
Bundesbank Warns of Euro (EUR) Exchange Rate Rise and Urges Greece to Reach A Deal
The Euro came under some pressure after the German Bundesbank warned that if the Euro were to strengthen sharply it would threaten the region’s economy. The bank also urged Greece to hurry up and reach a deal with its creditors.
‘Time is running out for Greece. The willingness to do a deal and act is lacking. We need to ensure that Greece can stand on its own legs without the help of partners. That’s why the ball is clearly in the court of the Greek government,’ said Jens Weidmann, the head of the Bundesbank.
Talks between Athens and its creditors ended in failure over the weekend raising concerns that a deal will not be reached by the end of the month.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
A lack of market moving UK data meant that the Pound Sterling was at the mercy of events and data releases from elsewhere.
Despite that the currency was maintaining its strength as economists look ahead to Tuesday’s UK inflation, and Wednesday’s UK unemployment data.
Also of interest will be the publication of the minutes from the Bank of England’s June policy meeting. If the minutes show that policymakers are growing more confident that an interest rate should occur we can expect the Pound to climb.
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