GBP/EUR slides as a result of strong Euro employment figures (Joshua Privett)

GBPEUR Rejected by 1.17 Price Level Again

GBP/EUR has, for the first time in a while, finally registered a change on GBP/EUR rates of exchange following any kind of strong showing in the Eurozone, with 1.41 seen on the markets once more as a result of a reduction in the Eurozone unemployment rate.

It has been difficult in recent months for a strong Eurozone to translate into a strong Euro, and this is due to prolonged background forces in the USA concerning an expected interest rate hike this December which are making the Euro a less attractive prospect.

The EU’s base interest rate currently sits at 0.05% compared to the 0.5% the US are expected to raise their interest rates to in December. Investors transferring their capital from Euros to Dollars in the hope of better returns on their funds in the future is what is causing the Euro to lose strength on the markets.

It seems this background market force is beginning to peter out, with rates moving away from the absolute highs of 1.43 and now back into the 1.41’s.

Previously this outflow of capital was so strong that whatever the positive data posted by the Eurozone, the injection of confidence into the Euro wouldn’t even register on GBP/EUR rates of exchange. The fact that this change in unemployment rate has finally corrected GBP/EUR rates suggests further falls on the horizons.

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