Events That Can Affect the Value of the British Pound Against the Euro
An economic calendar is an information resource which enables traders to keep abreast of global news events. The daily events are automatically updated with the advent of fresh information. The events on this calendar are classified into high, medium and low, depending upon their likely impact on the forex market.
For the purposes of this article, a European currency is being defined. In other words, it’s the euro, US dollar or the British pound. Forex markets in general operate worldwide. Some of the major currency pairs are the British pound against the Japanese yen, the Swiss franc against the Euro, the Australian dollar against the Japanese yen, and the British pound against the Swiss franc. These four currencies are traded on a daily basis.
The euro, as a global currency, has recently experienced a steady appreciation in value against the United States dollar. Since many analysts expect the euro to appreciate further, traders have started to pay greater attention to the news and developments in the euro zone. This has resulted in greater interest in the Euro news on the economic calendar.
A major news event that takes place on the EUR/USD calendar is the European Union summit. This can have a substantial effect on both the British and US economies. It could lead to a decrease in interest rates and lower inflation.
The next major event on the economic calendar is the European Parliament election. The elections will result in a new coalition government, which will likely focus on economic issues and the stability of the economy. If there is an improvement in the economy, then the British pound could appreciate against the euro.
In the aftermath of the elections, another major event is the Euro summit, which will occur after Christmas. This will be attended by the European Commission, the European Central Bank and the European Council. All the leaders from all the countries will meet in a venue which is agreed upon between the countries involved. If the negotiations are successful, then a new bailout agreement may be reached and will be signed before New Year.
Events on the economic news calendar which can affect the British pound against the euro include the introduction of a stimulus package to be launched by the UK government in September. and the introduction of a new EU deficit limit. It is estimated that these measures will increase the monetary base of the EU by around one trillion. Euros are expected to depreciate over time, but the exact value will not be known until after the new agreement has been signed.
There are two major events that will take place before the end of the year which can affect the value of the pound against the euro. These are the London meeting of the G-20 finance ministers, which will take place in March and the US Federal Reserve rate announcement.
The G-20 meeting will provide the basis for the European Commission to set their own economic calendar. The commission will be the one to decide the level of economic activity which will be expected to occur each quarter and they will decide the amount of growth that the economy needs. They are also the one which is responsible for setting the Euro/US Treasury Rate.
The Federal Reserve will release the official unemployment figures from six monthly surveys. These will be used to determine how much inflation is being caused by increased economic activity. These figures will be used to determine the rate of interest which should be charged to borrowers.
All of the events which take place on the economic calendar have an effect on the EUR/USD. If the news is good, then the British pound will appreciate. If there is an event which causes a decline in confidence, the value of the currency is expected to depreciate. The news events that will impact the Euro price are important and will determine the direction of the currency price.
The calendar, which is released every six months is the best source of information on the economic activity in the global economy. Therefore, it is very important for traders to pay close attention to these events on the economic calendar.