The pound to euro exchange rate saw the Sterling currency rise to an eight month high today, Thursday 25 January.
Pound Sterling is converting to €1.1493, in Bloomberg figures at 7:20am this morning.
This represents a very slight drop compared to yesterday, when the pound converted to €1.1400
However, the pound has increased even further from Monday, when the pound converted to €1.323.
Pound to euro exchange rate: Sterling stronger in eight month high
TorFX currency analyst Laura Parsons said the pound had reached an “eight month high” today, thanks to positive employment data from the UK.
She also said it may “push higher still” spending on the European Central Bank (ECB) decision later today.
“Upbeat UK employment data left the Pound broadly stronger on Wednesday, with the GBP/EUR exchange rate surging to an eight-month high.
“The pound remains trading in the region of €1.149 and could push higher still later today if European Central Bank (ECB) President Mario Draghi adopts a dovish tone following the central bank’s first rate decision of 2018.”
Pound to euro exchange rate: A Bloomberg graph shows the positive movement
Laura warned, however, that the exchange rate could move in favour of the euro, if President Mario Draghi “tighten[s] monetary policy”.
“However, any hints that the bank plans to tighten monetary policy could see GBP/EUR reverse yesterday’s gains.”
Yesterday, the pound dropped very slightly as ZEW economic sentiment survey data was released.
Laura said: “The GBP/EUR exchange rate moved away from its best levels on Tuesday despite encouraging UK public borrowing data as the German and Eurozone ZEW economic sentiment surveys impressed.
Pound to euro exchange rate: The rise is said to be down to positive UK employment data
“All measures outperformed expectations, indicating that confidence in the bloc is improving despite political uncertainty in Germany.”
“However, GBP/EUR remains close to €1.140 and the pairing could rally later today if the UK’s average earnings data reveals a surprise uptick in wage growth.”
This data, she predicted, would tip the pound to euro exchange rate back in the pound’s favour.
“As it stands, weekly earnings both including and excluding bonuses is forecast to hold at previous levels, but even a slightly higher result could prove pound-positive.”