EUR/GBP Price Analysis: Euro subdued ahead of ECB Minutes
With the news on a possible break-up in the Euro, analysts across the world are speculating on what effect the news will have on the EUR/GBP price. With a range of factors influencing the pricing of the Euro, the EUR/GBP price may fluctuate and the following may have an impact on the exchange rate.
The EUR/GBP Price Analysis: The most prominent reason why the EUR/GBP price may depreciate ahead of the ECU Minutes is the depreciation of the GBP against the Euro. The depreciation of the GBP against the Euro is mainly caused by the slowdown in the UK economy.
The Eurozone’s decision to embark on economic stimulus measures has reduced the growth of the UK economy and has reduced the interest rates of the Euro. As a result, the Euro may depreciate against the Pound. This means that a consumer who purchases a Euro from an established trader may have to pay more for the Euro than the British Pound as the British pound falls in value against the Euro.
On the other hand, the EUR/GBP price may increase if the British Pound increases in value against the Euro. It is not very likely to happen, as the Eurozone countries such as Greece, Portugal, Spain, Italy, and Ireland are all facing difficulties due to their own economic conditions and will probably not be able to fully contribute to the European monetary union.
An increase in the Euro’s worth will mean that a trader who buys the Euro at the beginning of the year has to pay more for his or her purchases than the exchange rate of the previous month. The exchange rate of the Euro against the Pound may depreciate over the next few months, as some of the peripheral countries start to recover from recession.
When the ECU Minutes is released on the morning of Friday, September 12, the EUR/GBP price will probably depreciate ahead of the release of the ECU Minutes. After the ECU Minutes have been released, the Euro will become more stable and should start to depreciate.
The market may react adversely to the news on the Euro and it is important to be ready for a sharp increase in the EUR/GBP price ahead of the ECU Minutes. if the ECU Minutes is released in the afternoon on Friday.
If the market believes that the news on the Euro will depreciate after the ECU Minutes is released, the market may react by making a large selling move. However, the market could also react by buying the Euro if it believes that the news will increase in value during the early hours of the following day on Friday.
On the morning of Friday, September 13, the market should see a sharp increase in the EUR/GBP price when the ECU Minutes is released and then continues to increase on Friday afternoon, if the news does not depreciate too much. This is because the Euro will be stable and may continue to stay in the GBP1.5 area after the ECU Minutes is released.
If the ECU Minutes is released on Friday afternoon, the Euro should depreciate in value and this will make the EUR/GBP price more volatile. The EUR/GBP price may also depreciate to above the GBP1.5 mark before recovering slightly during the late afternoon. on Friday afternoon.
However, the EUR/GBP price may fall further to below the GBP5 mark when the ECU Minutes is released in the afternoon. However, if the news on the Euro fails to depreciate too much, the market may react by making a very small decrease in the price.
If the news on the Euro does not depreciate, the market may depreciate in value again in the evening on Friday afternoon and the EUR/GBP price will remain at the same level as on Friday afternoon. However, the EUR/GBP price will rise again towards the end of the day on Friday afternoon.