Pound vs Euro forecast December 2010
Good morning. Sterling edged slightly higher against the Euro yesterday, as investors focused on euro zone debt problems ahead of a meeting of European finance ministers. Today we'll look at where Sterling vs Euro rates will move in December and the forecast outlook. First the usual snapshot of rates as at 08:30am:
- GBP/EUR 1.1805
- GBP/USD 1.5776
- GBP/AUD 1.5888
- GBP/NZD 2.0643
- GBP/CAD 1.5832
- GBP/CHF 1.5418
- GBP/ZAR 10.837
- GBP/JPY 130.30
- GBP/HUF 328.86
- EUR/USD 1.3357
Pound vs Euro
The euro zone ministers met yesterday and will face pressure to increase the size of a €750 bn safety net for troubled members in order to halt a debt crisis in the single currency bloc.
That is followed by a meeting today of ministers from the European Union, who are expected formally to approve an 85 billion euro aid package for Ireland and discuss the reform of EU budget rules.
An IMF report obtained by Reuters said the euro zone should have a bigger rescue fund for member states in trouble. Germany rejected such a move and dismissed calls for joint euro zone bonds.
The ongoing problems in the Eurozone is the reason GBP/EUR rates are significantly higher than recently. While concerns are ongoing in the EU, the Euro will remain weak. Sterling is also weak however, but focus remains firmly on the Eurozones problems and while it does the Euro will remain weak.
At some point there will be an agreement and consensus on how to proceed with the PIIGS (Portugal, Ireland, Italy, Greece & Spain). When this happens the market will be calmer about the Euro and we expect sooner or later the single currency will regain it's strength. When it does expect GBP/EUR rates to fall sharply.
Of course, in the meantime there is every chance the Euro will weaken further, however predicting if/when this will happen is nigh on impossible. There are however tools you can use to take advantage of market movements in your favour, without simply hoping rates will move your way.
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Things get busier in terms of data releases as we see a GDP estimate for the UK. The figure estimates UK growth, and as such can often have a big impact on Sterling exchange rates. Also for the UK we see Retail Sales, Industrial Production and Manufacturing Production.
So, lots that will give clues on the UK economy; expect Sterling volatility.We also have some interest rate decisions for Australia and Canada; we expect no change.
If you are looking for the best exchange rates, click the link below to send us an enquiry, and have a free consultation on what's happening in the currency markets.