- 2016 Pound Euro Exchange Rate Touches 1.17 – Pair struggles to hold gains however
- UK’s September Employment Stats Impress – But October jobless claims cause concern
- Final October Inflation Stats Mixed – Slow monthly inflation but solid yearly CPI
- GBP Forecast: Is UK Employment in Danger? – Some analysts believe jobless claims could soar
2016 Pound Euro Exchange Rate Ends Week Slightly Higher
After performing strongly on Thursday evening and Friday morning, the Pound gave up much of its Thursday gains on Friday afternoon. GBP EUR was on track to end the week’s European session much closer to the week’s opening levels of just above 1.16.
The Pound was sold against not just the Euro, but many major currencies as traders took profit from the British currency’s Thursday and Friday highs.
Comments from Germany’s finance minister that Britain may continue having to pay obligation fees to the European Union even after leaving the bloc continued to weigh on GBP demand later in the day.
The Euro’s performance wasn’t entirely impressive either, as the shared currency was left weaker after the morning’s speech from European Central Bank (ECB) President Mario Draghi in Frankfurt.
Draghi took on a generally dovish tone, hinting to some traders that the bank would be extending its quantitative easing (QE) measures in December’s meeting.
(Previously updated 12:42 GMT 18/11/2016)
The 2016 Pound Euro exchange rate was able to hold its Thursday gains for most of Friday morning, holding above the key level of 1.17 and even briefly extending its advances.
However, GBP EUR’s performance slipped slightly towards the middle of the day as traders took profit from the Pound’s weekly highs. The British currency dipped slightly against most major rivals and was down -0.2% against the Euro.
This weakness was also partially inspired by ongoing Brexit jitters thanks to comments made by German finance minister Wolfgang Schäuble that Britain may have to continue paying various obligation fees to the European Union for an additional decade after the Brexit process is complete.
(Previously updated 16:41 GMT 17/11/2016)
2016 Pound Euro Exchange Rate Hits New Two-Month High on Thursday
Despite trending flatly for most of the day, the 2016 Pound Euro exchange rate reached new weekly highs at various points in Thursday afternoon trade. GBP EUR reached near the level of 1.17 as the European session drew to an end and its highest level since the 15th of September.
Support from the day’s Eurozone CPI figures was not enough to keep the shared currency sturdy after Thursday’s American session left the previously weaker US Dollar stronger again thanks to an optimistic US economic outlook from Fed Chairwoman Janet Yellen.
Sterling, on the other hand, continued to benefit throughout the day from an unexpected surge in retail sales. Despite warnings that retail sales could slump in the coming months, traders used October’s year-on-year retail sales score of 7.6% as an excuse to continue the Pound’s advances.
(Previously updated 12:58 GMT 17/11/2016)
After recovering on Wednesday, the 2016 Pound Euro exchange rate struggled to continue advancing on Thursday as mid to long-term economic concerns limited GBP gains despite a strong UK retail sales report. Analysts warned that British retail sales could slump in the coming months if Sterling’s low value finally hits consumer prices.
The Euro, on the other hand, trended solidly due to various factors. While October’s final Eurozone Consumer Price Index (CPI) came in slower-than-expected month-on-month, the yearly figure printed a solid 0.5%. EUR also benefitted from negative correlation of the day’s weaker US Dollar trade.
(Published 07:00 GMT 17/11/2016)
The 2016 Pound Euro exchange rate rebounded from Tuesday’s lows to trend around the week’s opening levels of 1.16.
Sterling was given a slight leg-up by Wednesday’s September UK employment results, but a surprising increase in jobless claims in October weighed on the currency’s advance potential. Despite this, the Euro lacked demand of its own and failed to beat down the Pound.
Pound (GBP) Holds Ground Despite Brexit Fears and Mixed Employment Stats
After its poor Tuesday performance, the Pound was able to recover and hold firm on Wednesday despite Brexit concerns continuing to weigh on the minds of investors.
The process of the UK’s EU withdrawal returned to market consciousness on Tuesday after a memo was reportedly leaked from the UK government’s cabinet stating that the government still had no concrete Brexit plan with only five months until the proposed date to activate Article 50.
While Downing Street officials denied the validity of the document, the news was enough to concern investors as the outlook of Britain’s economy in the coming years continued to look increasingly uncertain.
Traders weren’t entirely optimistic on the Pound on Wednesday either. While the currency was able to hold above Tuesday’s lows, its movement was limited by the day’s mixed employment stats.
Britain’s unemployment rate for the three months into September surprised by improving from 4.9% to 4.8%, the lowest level of unemployment in over 11 years. Despite this, investors were concerned by an underwhelming wages score of 2.3%, as well as October’s jobless claims results.
While the claimant rate remained at 2.3%, October saw an unexpected 9,800 new jobless claims filed. September’s number of new claims also saw a considerable revision, from 700 to 5,600.
This sparked speculation that UK employment could worsen in the coming months. Ben Brettell from Hargreaves Lansdown stated;
‘All in all, it does seem likely that unemployment could tick up somewhat during the coming months, though dire predictions made in the immediate aftermath of the vote appear wide of the mark.’
Euro Pound Exchange Rates (EUR GBP) Too Limp to Hold Tuesday Highs
The shared currency was unable to hold on to previous advances, as concerns like the rise of populism, as well as Tuesday’s mixed growth data, made it difficult for the Euro to hold its ground.
Wednesday data didn’t offer the Euro any new footholds either, leaving the shared currency feeling the remnants of Tuesday’s recovery rally.
Eurozone investors may also have been slightly put off the shared currency by comments from the European Commission on Wednesday.
According to Reuters, the European Commission stated that the whole Eurozone needed to loosen fiscal policy in 2017 in order to help support the European Central Bank (ECB) in stimulating the bloc’s economy. The Commission stated;
‘The Commission considers that there is a case for a significantly more positive fiscal stance for the Euro area.
While there has been significant progress in recent years in the Euro area, the recovery is still not accelerating, there is still significant unused capacity in labor and capital and uncertainty is high’
2016 Pound Euro Exchange Rate Forecast: Data Could Influence GBP EUR on Thursday
Over the last week, global political events such as the Brexit, Donald Trump’s election as US President and the rising tide of populism have dominated foreign exchange market movements.
However, with Sterling’s mixed Wednesday performance partially a result of October’s poor jobless claims scores, it’s possible the 2016 Pound Euro exchange rate could be influenced by October data on Thursday too.
Thursday will see the publication of Britain’s October retail sales results, as well as the Eurozone’s final October Consumer Price Index (CPI) figures.
Interestingly, analyst consensus sees the finalised Eurozone inflation figure being cut to 0.3% month-on-month, failing to meet the preliminary score of 0.4%. On the other hand, markets expect the year-on-year score to come in at a solid 0.5% – an upwards revision on initial estimates.
If Eurozone inflation prints below expectations, the Euro is likely to weaken on Thursday as traders will grow concerned by not just rising populism but the currency bloc’s ongoing economic recovery struggles.
Sterling may also weaken if Britain’s October retail sales figures disappoint, but even if the scores beat expectations GBP advances may be limited by Brexit worries.
With the UK government’s Article 50 challenge being addressed in the Supreme Court in early December, this looks to be the next big focal point the 2016 Pound Euro exchange rate.