- EUR GBP rate shifts to 0.83 – GBP EUR dips to 1.19
- Euro mixed ahead of confidence stats – German advances forecast
- Pound weakened on continued Brexit concerns – Former Chancellor Osborne advises continued trade links
The Euro has been unsettled during trading today, on account of uncertainty ahead of some key German Ifo confidence scores. Fortunately for the Euro, however, present forecasts have been positive when it comes to German economic outlooks.
On the UK side of trading, the Pound has been unstable overall, on account of the latest statements regarding Brexit. Speaking on the weekend, former Chancellor George Osborne stated that regardless of how the UK exits the EU, it should endeavour to retain trade links with the continent. While a sound economic suggestion, it remains to be seen whether keeping ties to the past will be a priority for the May Government.
(Last updated December 19th, 2016)
The Pound’s outlook in the pairing is not particularly promising, on account of dim forecasts for the last week before Christmas.
Euro Pound Exchange Rate News: Greek and Italian Debt Worries Limited Euro Gains Last Week
The Euro Pound exchange rate was able to gradually appreciate last week, though ongoing background events kept investors wary about committing heavily to the EUR.
In data terms, German inflation dipped on the month in November, while the Eurozone ZEW economic sentiment index for December rose above forecasts.
Thursday also brought notable announcements, in the form of overall rising PMIs in Germany and the Eurozone.
The destabilising influences throughout the week were Greece and Italy. Greece continued to struggle with the danger of losing its bailout funding due to arguments with creditors, while Italy’s banks continued to hold out for relief despite dangerous levels of debt.
Pound Euro Exchange Rate Update: High Volatility for Pairing on Inflationary Fears
The Pound Euro exchange rate was greatly destabilised over the previous week, mainly on account of inflation and BoE-based news.
Tuesday saw inflation in November rise higher-than-expected; this was followed by wage growth figures rising in October.
Despite this latter news, however, the Pound remained unsettled, owing to the wage result not being considered high enough to counteract inflationary pressures.
The Bank of England (BoE) also factored into last week, making its last interest rate decision of the year.
The BoE left interest rates at 0.25% as expected, but raised concerns by lowering its inflation forecast for 2017.
While slower inflation would stabilise the economy, it would also make a BoE rate hike less likely; as a case in point, it was left uncertain as to whether the BoE would cut or raise the UK rate next time round.
Future EUR GBP Forecast: Optimism for Eurozone Ecostats could Trigger Euro Pound Advance
The Euro could well be the clear winner against the Pound this week, given current expectations for Eurozone data release results.
Monday morning is set to show rising German Ifo confidence scores for December, while Q3 Eurozone wage growth also has an increase expected.
Later on in the week, December’s Eurozone consumer confidence flash is forecast to improve on Wednesday. EUR GBP trading may end on a somewhat sour note, however, given that the German GfK consumer confidence sore is estimated to drop on Friday.
On the less optimistic UK side, Confederation of British Industry (CBI) distributive trades are forecast to fall on Tuesday and Government borrowing deficits are expected to expand on Wednesday.
Ending the week will be Friday’s Q3 GDP growth rate results, which are expected to dip on the month but rise on the year.
Current Interbank Exchange Rates
At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.83 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.19.