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Euro Pound (EUR GBP) Exchange Rate Slips on Slow Data Day for Eurozone and UK

  • Euro mixed overall against peers – Loss against Pound due to latter’s strength
  • ECB decisions are investor focus – Predictions for no policy shift this week
  • Pound advances overall – ARM purchase by Japan generates optimism
  • Eurozone confidence stats due tomorrow – UK MPs to decide on Trident renewal

The Euro has declined noticeably against the Pound lately, although in most other pairings the single currency has managed to make a number of advances.

The Pound has been making steady gains against most of its peers, with its latest movements being clear improvements on last week’s closing lows.

Eurozone Economic News: Euro Stable as Forecasts come for No ECB Action This Week

The Euro has been high of late, with gains consisting of advances of 0.2% against the Canadian Dollar (EUR/CAD), 0.3% against the Swiss Franc (EUR/CHF) and 0.7% against the Japanese Yen (EUR/JPY). In less supportive news, the Euro has slipped by -0.4% against the Pound (EUR/GBP) and the Polish Zloty (EUR/PLN), in addition to dropping by -1.4% against the South African Rand (EUR/ZAR).

Actual data out of the Eurozone has been fairly sparse of late, with the attention of most economists being focused on whether or not the European Central Bank (ECB) will implement any kind of policy adjustments this week in the wake of the EU Referendum.

The general consensus has been that no change will come in July, though September could bring further stimulus measures from the central bank.

Pound Supported by Japanese Buyout of UK Chipmaker

The Pound has managed to appreciate against most of its peers lately, which has equated to gains of 0.3% against the Euro (GBP/EUR), 0.7% against the New Zealand Dollar (GBP/NZD) and 1.1% against the Indian Rupee (GBP/INR). In less beneficial movements, the Pound has fallen by -1.2% against the South African Rand (GBP/ZAR) and -1.8% against the rallying Turkish Lira (GBP/TRY).

One of the biggest pieces of business news out of the UK today has been that Japanese company Softbank and UK microchip maker ARM Holdings have confirmed that Softbank will be buying out the UK operation for £24bn. This news has been welcomed by Chancellor Phillip Hammond, who has stated that:

‘Just three weeks after the Referendum…it shows that Britain has lost none of its allure to international investors. Britain is open for business and…to foreign investment. Softbank’s decision confirms that Britain remains one of the most attractive destinations globally for investors to create jobs and wealth’.

In other UK news, Bank of England (BoE) official Martin Weale has been commenting on how the ‘Brexit’ decision has influenced monetary policy. These comments were met with a muted reception, compared to last week’s developments that saw an August interest rate cut as virtually assured.

Wedge of Euro notes

Future EUR, GBP Forecast: Trident Decision due from MPs Today, Eurozone Confidence Stats due Tomorrow

The remainder of the day for the Euro and the Pound may not see any radical shift in the pairing’s performance, especially given that no major data is due from the Eurozone or the UK until tomorrow morning.

The only notable development due in the UK today will consist of the afternoon’s Commons vote on whether or not to renew the Trident nuclear defence system at the cost of billions of Pounds, while tomorrow morning for the Eurozone will bring the ZEW economic sentiment index for July along with the construction output printing for May.

Forecasts have been negative in both fields.

Current EUR, GBP Exchange Rates

The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.8338 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.1995 today.