By Will Peters

The euro is likely to continue its decline against the British pound in the medium-term say analysts at Swissquote Bank.

In late morning trade in London we see the euro to pound exchange rate (EUR/GBP) trading unchanged on last night's closing level.

The spot market exchange rate is quoted at 0.8307.

PLEASE NOTE: The above quote is taken from the inter-bank market. Your bank will affix a discretionary spread when passing on a retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thereby delivering up to 5% more currency. Please learn more here.

Forecasting further declines in EUR/GBP

Swissquote Research have today told clients to expect further declines in the euro pound exchange rate:

"EURGBP started the year with decent selling pressure. Trend and momentum indicators are steadily negative and the cross trades comfortably within the downtrend channel building since July 2013.

"We keep our bearish view for a daily close below 0.8400 and place our target level at 0.82626 (fibo 38.2% on 2011-2012 drop)."

It is worth noting that consensus currently favours the British pound over its Eurozone counterpart. Backing declines in EUR/GBP in the short-term is Geoffrey Yu at UBS:

"With the MACD firmly below its zero line, there’s potential for extension of the bearish trend. Support is at 0.8253, a break below which would expose 0.8160. Resistance is at 0.8346."

Euro ignores negative inflation and German employment data

The euro has shrugged off what would have traditionally expected to have been negative news which came in the form of December inflation data.

The Eurozone Consumer Price Index (YoY) came in at 0.8%, analysts had expected 0.9%. This means inflation continues to race further below the European Central Bank's targeted inflationary level that lies just below 2%.

The ECB now has further space to stimulate the EZ economy; in November the ECB cut its benchmark interest rate to a record low of 0.25%, reflecting the low inflation outlook.

The ECB will gather for its latest meeting later this week, although no changes to policy are expected.

The stubborn Euro also batted off news that German unemployment grew by 15K in December, analysts had expected the figure to remain flat.