Pound to euro exchange rate: Sterling needs to ‘break out of its current rut’

The pound has not been propelled much higher in the last day but will hopefully improve today.

Its movement is dependent on interest rate decisions from today’s Eurozone and the European Central Bank (ECB)announcement.

The pound is currently trading at €1.125 against the euro, according to Bloomberg.

Laura Parsons, currency analyst at TorFX, spoke to Express.co.uk regarding the latest exchange rate figures.

She said: “With little in the way of UK news to propel it higher, the GBP/EUR exchange rate spent Wednesday trading in the region of €1.125. 

“Today is all about the Eurozone and the European Central Bank’s (ECB) latest interest rate decision. 

“A dovish stance from the ECB would be euro-negative and could give the pound a chance to break out of its current rut.”

However, despite its limited movement, the pound was trading near a one-week high yesterday against the single currency.

The pound was affected by the latest Brexit developments.

Prime Minister Theresa May has announced that she is downgrading the Department for Exiting the European Union (DExEU).

The move means that Mrs May herself will be leading Brexit talks from now on, with new Brexit Secretary Dominic Raab operating in a reduced capacity.

This news has had a mixed reception among pound traders.

On the one hand, it raises the chance of progress in Brexit talks which have been stalled for months.

But on the other, the new negotiating team may have just as much luck as their predecessors, which would reduce the overall impact of the change in line-up.

Over in the Eurozone, yesterday German economic news failed to cause significant euro movement and left the single currency trading tightly against the pound.

Ifo survey data showed falling German business conditions, along with a dip in future expectations.

One piece of good news is that perceptions of current conditions in July rose, instead of falling as expected.

Putting the data into context, Ifo’s Clemens Fuest said: “Companies were slightly more satisfied with their current business situation, but scaled back their business expectations slightly.

“The German economy continues to expand, but at a slower pace.”

As for today, the morning’s GfK consumer confidence figure could lower euro trader confidence if it shows a decline, but the main event is the ECB meeting.

Policymakers aren’t expected to adjust interest rates from 0 per cent, but they could still prompt a euro pound exchange rate rise if they back a 2019 rate hike.