Euro to Pound Exchange Rate Advances despite Lack of Drive in Euro
Could the market have been too strong on the Pound (GBP) last week? The Euro to Pound Sterling (EUR/GBP) exchange rate is climbing today, as Bank of England (BoE) interest rate cut speculation continues to weigh on Sterling.
Following last week’s slump from 0.8521 to 0.8434, EUR/GBP’s movement was mixed yesterday.
EUR/GBP briefly dipped but ultimately avoided losses, and today the pair is climbing again. At the time of writing, EUR/GBP is trending higher near the level of 0.8462.
The Euro (EUR) is gaining more due to weakness in the Pound, as the latest Eurozone data was not been hugely supportive. For now, Euro to Pound exchange rate investors are eagerly awaiting Thursday’s Bank of England news.
Euro (EUR) Exchange Rates Lack Drive as Yesterday’s Eurozone Data Falls Short
The Euro is gaining against the Pound despite a lack of drive. In fact, the shared currency’s movement was fairly weak yesterday as the latest German confidence stats disappointed investors.
Ifo’s German confidence survey stats for January fell short in every notable print. Economists at Ifo said that the data continued to point towards recovery overall, but the weaker stats weighed on the Euro slightly.
The day’s French jobless claims results were a little better than expected.
As the Eurozone outlook remains mixed, the shared currency has been driven more by strength in rival currencies.
The strength in the Euro also comes as yesterday’s market move towards safe haven currencies cools slightly, though safe havens are likely to remain appealing amid the coronavirus outbreak in China.
Pound (GBP) Exchange Rates Tumble as Bank of England (BoE) Jitters Persist
Last week’s most notable UK ecostats beat forecasts, and caused bets of a January rate cut from the Bank of England (BoE) to lighten.
It caused the Pound to surge higher throughout the week.
However, the data was not strong enough to cause BoE rate cut bets to totally fade. In fact, analysts still predict there is around a 50/50 chance that the BoE could cut rates as soon as this week.
Amid a lack of notable UK data until later in the week, the Pound is sliding back from its recent highs. Investors may have run too high on the Pound last week considering BoE bets persist and are selling the currency from its highest levels in profit-taking.
Euro to Pound (EUR/GBP) Exchange Rate Outlook Depends on Bank of England (BoE)
Tomorrow’s German and French consumer confidence results could cause some movement in the Euro if they surprise investors.
However, the Euro to Pound (EUR/GBP) exchange rate may not see much shift as investors eagerly await Thursday’s Bank of England (BoE) decision.
The highly anticipated January BoE decision could still go either way according to analysts. If the BoE opts to cut UK interest rates and warn of economic weakness in Britain, EUR/GBP will rise higher.
On the other hand though, if the BoE shows more confidence in a 2020 economic rebound, the Pound would strengthen notably and EUR/GBP could slump again.
Key Eurozone data could also influence EUR/GBP towards the end of the week.
German unemployment and inflation data is due on Thursday, with German retail as well as Eurozone growth and inflation likely to drive the Euro to Pound (EUR/GBP) exchange rate on Friday.