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Euro Pound (EUR/GBP) Exchange Rate Soars as Sterling Collapses

  • Euro made considerable gains against the Pound yesterday – Positive performance mainly due to Sterling drop-off
  • UK currency slumps on BoE warnings – Central bank offers mixed outlook on national economy
  • UK PMIs offered prior disappointment – Continuing trend seen this week
  • ECB speeches incoming today – Silence expected from the UK until tomorrow

EUR GBP Exchange Rates Static Today Despite German Data

The Euro Pound exchange rate hovered around the day’s opening levels on Wednesday as GBP demand remained weak and disappointing domestic data weighed on the Euro.

While German Factory Orders massively undershot expectations, Retail PMIs for Germany, Italy and the Eurozone also offered cause for concern.

Factory Orders printed at 0.0% on the month in May and -0.2% on the year, defying forecasts of 1.0% and 0.9%.

The EUR GBP exchange rate was trading in the region of 0.8543

(Previously updated 08:00 06/07/2016)

The single currency has been a relatively safe option for investment of late, on account of the latest domestic data proving relatively positive for investors in the Euro.

The Pound, meanwhile, has been on an all-around downtrend, which has stemmed from the fact that a stable future for the UK economy is by no means assured.

Although Sterling attempted to edge higher at the beginning of last week, the currency has since slipped to new multi-year lows against its most-traded peers amid warnings from the Bank of England (BoE) and hints that further stimulus could be on the way.

Eurozone Economic News: Mixed Result of PMIs Eclipsed by Retail Sales Results

The Euro has been on a course of recovery over the past 24 hours, having risen out of undesirable exchange rates against most of its exchange rate peers.

The source of this support has been domestic data, although the starting Eurozone stats, covering the services and composite results for June, have fallen overall with the exception of the Spanish and Italian services result and the overall Eurozone composite score.

More beneficial to the Euro’s appeal were the May retail sales results, which rose overall in the Eurozone on both the month and the year.

Pound Sterling Nosedives after BoE Report Unnerves Investors

The Pound has been in extremely low demand recently, with severe devaluations coming from the week’s falling construction, services and composite PMIs for June.

In addition to this, the Bank of England (BoE) has recently released its first financial stability report since the Referendum result. Although the central bank stated that the UK’s economic infrastructure was in a much better state than the late 2000’s financial crash, investors took little notice, instead latching onto the more concerning aspects of BoE Governor Mark Carney’s forecasting.

As part of his reassuring strategy, Carney said:

‘If there is a slowdown in credit, it will be demand-driven, not supply driven. It’s important to ensure that there is no question about the availability of credit. It is the one thing we want to take off the table’.

GBP Pound exchange rate

Future EUR, GBP Forecast: ECB Speeches have a Clear Stage on UK Data Shortage

Today will bring only Eurozone economic announcements, with the next scheduled UK stats expected tomorrow morning.

Despite this, however, it remains possible that some UK news will emerge in the form of Labour MP Angela Eagle finally making a bid for the Labour leadership, having long-threatened this course of action if current Leader Jeremy Corbyn does not stand down and resign.

Regarding actual data releases, the Eurozone will bring to the table the positively predicted German factory orders result for May, as well as the less-optimistically forecast Spanish industrial production outcome for the same month.

Other contributions that may influence the Euro will consist of a trio of European Central Bank (ECB) speeches, coming from President Mario Draghi and officials Peter Praet and Vitor Constancio.

Recent EUR, GBP Exchange Rates

The Euro to Pound Sterling (EUR/GBP) exchange rate has been trending in the region of 0.8515 and the Pound Sterling to Euro (GBP/EUR) exchange rate has been trending in the region of 1.1745 recently.