Pound Euro (GBP/EUR) Exchange Rate Narrows as Suisse Bank Receives Swiss Bailout
(Article updated 08:30, 16/3/23) The Pound Euro (GBP/EUR) exchange rate recovered some ground overnight, and is trading narrowly this morning.
In a statement overnight, Credit Suisse announced that they would receive a stimulus of around 50 billion swiss francs from the Swiss Central Bank. With this move, the bank aimed to stabilise Credit Suisse, and went someway to alleviate market jitters.
Ulrich Koerner, CEO of Credit Suisse, stated:
‘These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders.
We thank the SNB and FINMA as we execute our strategic transformation. My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs.’
Furthermore, investors are awaiting the European Central Bank’s (ECB) latest interest rate decision this afternoon.
At the time of writing, GBP/EUR is trading at around €1.1388, showing little movement from the morning’s opening rates.
Original article continues below:
Pound Euro (GBP/EUR) Exchange Rate Trims Gains as Suisse Bank Makes Small Recovery
(Article updated 16:35, 15/3/23) The Pound Euro exchange rate has had quite the day today, having now trimmed some gains. The bank Credit Suisse’s share prices recovered somewhat, now only down by 16% versus the 30% earlier.
Because of this, GBP/EUR has softened somewhat, but still remains strong. However, the Pound appears to be remaining largely weak against other peers, as the market mood remains fragile.
At the time of writing, GBP/EUR is trading around €1.1408, a rise of roughly 0.7% from the morning’s opening rates.
Original article continues below:
Pound Euro (GBP/EUR) Exchange Rate Rockets as European Banking Sector Plummets Further
(Article updated 13:50, 15/3/23) The Pound Euro exchange rate is soaring higher this afternoon as the European banking sector edges closer to collapse.
Credit Suisse, the bank at the heart of the routing, has seen its shares drop by 30% over the course of today. As a globally operating the bank, if it collapses the impact would be much more broad than banks such as Silicon Valley Bank.
Furthermore, the sell-off is prompting investors to drastically reprice their expectations of rate hikes from the European Central Bank (ECB). Due to the possible impact of further tightening, it seems less likely that the ECB will continue with hawkish hikes.
Elsewhere, UK Chancellor Jeremy Hunt unveiled the Spring Budget. Largely in line with expectations, Hunt outlined additional energy and child care support. The budget was also accompanied by an optimistic economic forecast from the Office of Budget Responsibility (OBR).
At the time of writing, GBP/EUR is trading at around €1.1455, leaping by roughly 1.1% from the morning’s opening rates.
Original article continues below:
Pound Euro (GBP/EUR) Exchange Rate Soars as Credit Suisse Shares Plummet
(Article updated 11:55, 15/3/23) The Pound Euro exchange rate is continuing to strengthen today, following news that Credit Suisse shares had begun to crater.
Earlier, one of the largest investors in the Swiss bank stated that they were unable to provide more financial assistance. Following this, shares in the bank dropped by around 25%, with fears igniting that the European banking sector was less stable than previously thought.
Because of this, the common currency has taken a dive against most major peers, leading to Sterling strengthening against it.
At the time of writing, GBP/EUR is trading around €1.1399, a rise of roughly 0.6% from today’s morning rates.
Original article continues below:
Pound Euro (GBP/EUR) Exchange Rate Firms as Investors Await Spring Budget
The Pound Euro exchange rate is ticking upward this morning, as investors await UK Chancellor Jeremy Hunt’s spring budget.
At the time of writing, GBP/EUR is trading around €1.1350, an increase of roughly 0.2% from the morning’s opening rates.
Pound (GBP) Firms as Hunt Outlines Energy Support Ahead of Spring Budget
The Pound (GBP) is seeing modest support this morning ahead of UK Chancellor Jeremy Hunt’s spring budget.
While a modest ‘boring’ budget is expected, early announcements ahead of the full package appear to be inspiring some optimistic trade. This morning, Hunt announced that the Government would extend the current energy support package for another three months, providing support to millions of UK households.
Hunt stated:
‘With energy bills set to fall from July onwards, this temporary change will bridge the gap and ease the pressure on families, while also helping to lower inflation too.’
With further growth-boosting measures expected, alongside an upbeat forecast, investors are hopeful to see promising news.
Elsewhere, a risk-averse market mood may be capping Sterling’s gains, due to the currency’s increasingly risk-sensitive nature.
Euro (EUR) Undermined by Downbeat German Economic Outlook
The Euro (EUR) is trapped in narrow boundaries this morning, as bleak economic news from Germany saps sentiment.
The IfW stated this morning that a strong economic recovery was unlikely in 2023, due to continued falls in consumer purchasing power.
While the institute upgraded Germany’s growth outlook to 0.5%, the report remained downbeat. The IfW stated:
‘The economic consequences of the war in Ukraine have stalled the recovery from the pandemic and noticeably depressed the level of gross domestic product. High inflation is reducing households’ disposable incomes and leading to a decline in private consumer spending in the current year.’
However, investors continue to await the latest interest rate decision from the European Central Bank (ECB). The bets on hawkish guidance from the ECB remain present, and may be cushioning the Euro.
Investors remain certain that the ECB will deliver a 50bps rate hike tomorrow, before shifting to a dovish, data driven outlook.
Pound Euro (GBP/EUR) Exchange Rate Forecast: ECB Rate Hike in Focus
Looking ahead for the Euro, the core catalyst of movement may be tomorrow’s interest rate decision from the European Central Bank.
A hike of 50bps is expected, but if the ECB commits to hawkish forward guidance the single currency could strengthen. After the rate decision, the ECB will hold a press conference, where they may speak about the Eurozone’s economy. If the bloc’s economic outlook remains optimistic, EUR could strengthen further.
For the Pound, the data calendar is thin through to the end of the week. Because of this, Sterling’s direction may depend on how markets react to Chancellor Jeremy Hunt’s budget.
If the growth-boosting measures are delivered, GBP could rally on the optimism brought by an upbeat forecast.