Pound to Euro Exchange Rate Forecast – The Pound reached a 22-month high of 1.2308 against the Euro

By on April 30th, 2012.
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Pound to Euro Exchange Rate Forecast - The Pound reached a 22-month high of 1.2308 against the EuroLooking ahead this week and the threat of a Spanish bailout package is likely to overshadow the bulk of the Eurozone’s data releases.

Foreign Currency Market Update – GBP / EUR Update

The Pound reached a 22-month high of 1.2308 against the Euro this morning as the Instituto Nacional de Estadistica announced that Spain has entered a double-dip recession. The Spanish economy contracted by 0.3% in the first three months of 2012, which marks a technical recession as the country’s economy also shrunk by the same amount in the last three months of 2011.

The weak Spanish GDP figures are the latest in a long line of downbeat data to be released from Spain over the past week. On Thursday night Standard Poor’s downgraded Spain’s credit rating from A to BBB+ which raised concerns about the country’s ability to pay off its mammoth debt pile. The Unemployment data released on Friday showed that 24.4% of the population are now out of work. And weak Retail Sales – a decline of 3.7% in March – marked the 21st consecutive month of reduction. The Euro has suffered significantly as the pain in Spain hits investor confidence in the single currency.

The Pound has been performing exceptionally well against the Euro lately, despite the shock announcement last week that the UK economy contracted by 0.2% in the first three months of 2012. It seems that investors are viewing the figures with a degree of mistrust as recent economic data has reflected positively on the UK. Many analysts are expecting an upward revision at some point in the future which has allowed Sterling to continue its strong surge against the Euro.

Looking ahead this week and the threat of a Spanish bailout package is likely to overshadow the bulk of the Eurozone’s data releases. PMI’s in Manufacturing and Services, the Unemployment Rate, and the European Central Bank Rate, are all expected to remain unchanged. Whereas in the UK, Manufacturing, Construction, and Services PMI’s are all predicted to fall slightly from March’s exceptional strong levels. The Pound is likely to hold steady in and around today’s 22-month high against the Euro.

Heads Up

Summary of major upcoming data releases that we think may move the market.

Related posts:

  1. Pound to Euro Exchange Rate Forecast – The Pound to Euro exchange rate reached a 4-month high of 1.2150 over the Easter weekend
  2. The Pound to Euro exchange rate reached a 2-week high of 1.2052
  3. The Pound to US Dollar exchange rate reached a four month high on Tuesday
  4. Pound to Euro, US Dollar exchange rate: The Pound has pushed to a five month high against the U.S Dollar and achieved a fresh 19-month high versus the Euro
  5. Pound to Euro Exchange Rate Forecast – The Pound to Euro exchange rate reached 1.2180 this morning, a level not seen since August 2010

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