The Euro Pound exchange rate has improved this afternoon, thanks to a forecast-beating result for German inflation in December.
- EUR GBP rate recovers to 0.85 – GBP EUR slips to 1.17
- Euro performance improves on German inflation stats – Surprise UK resignation shocks GBP investors
- PMIs remain in focus for Eurozone and UK tomorrow – Negative outlook on Eurozone services PMI
The Euro has managed to restore itself against the Pound today, providing drama for investors even at such an early time of the year.
The afternoon’s Eurozone news has seen preliminary German inflation rate stats rise on the month and the year, above forecasts in both cases.
Meanwhile, in the UK, GBP investors have been shocked by the news that UK-EU Ambassador Sir Ivan Rogers has resigned, throwing officials into panic about who could take on the key role in the future.
Looking ahead to Wednesday morning, the Pound may firm against the Euro if the December construction PMI rises as expected. Also due in the morning are Eurozone-wide services and composite PMIs, which are set to respectively dip and remain at 53.9.
(Last updated January 3rd, 2016)
Poor Start to 2017 for Euro Exchange Rate; EUR GBP Slides on Investor Uncertainty
The Euro Pound exchange rate has crashed by -0.5% today, owing to the Eurozone outlook for 2017 generating more concern than optimism among Euro investors.
The big issues at the present time include how the French and German elections will turn out, as well as what kind of future lies in store for debt-riddled Greece and Italy.
Topping off this uncertainty is the fear of what Brexit negotiations could bring, given that concerns have been voiced that more countries may try to leave the EU after the UK departs.
On the data side of proceedings, the German unemployment change for December has been positive, with the number of unemployed persons falling by more than expected in the last month of 2016.
Pound Sterling Euro Exchange Rate Soars after UK Manufacturing Stats Beat Forecasts
The Pound Euro exchange rate has risen considerably so far today, thanks to the outcome of the earlier Markit UK manufacturing PMI for December.
Having previously been forecast to remain stagnant at 53.6, the actual rise to 56.1 was a pleasant surprise for investors and economists alike, and saw the Pound jump around 0.6% against the Euro.
Commenting on the news was Markit Senior Economist Rob Dobson, who said;
‘The UK manufacturing sector starts 2017 on a strong footing. The headline PMI hit a two-and-a half year high in December, with rates of expansion in output and new orders among the fastest seen during the survey’s 25-year history.
Based on its historical relationship against official manufacturing output data, the survey is signalling a quarterly pace of growth approaching 1.5%, a surprisingly robust pace given the lacklustre start to the year and the uncertainty surrounding the EU referendum’.
Future EUR GBP Forecast: Could German Inflation Rate Data put Euro Recovery on the Cards?
The Euro may be able to restore itself against the Pound in the near-term, given predictions for this afternoon’s German inflation rate stats for December.
At the time of writing, a rise in inflation had been forecast, from 0.8% to 1.2% on the year, and from 0.1% to 0.4% on the month.
This outcome could enable a EUR GBP rise, though the surprising UK manufacturing result coupled with a lack of other UK news over the rest of the day could leave investors favouring Sterling.
On the UK front, Wednesday morning is due to show the construction PMI result for December, which is currently forecast to rise from 52.8 to 53.2.
Current Interbank Exchange Rates
The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.84 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.18 today.