‘Business as Usual’ ECB Meeting Causes EUR/GBP Exchange Rate Losses
The Euro (EUR) has made a minimal loss against the Pound (GBP) today, following an uninspiring European Central Bank (ECB) meeting.
July’s late ECB event saw policymakers leave interest rates at 0% as expected, while ECB President Mario Draghi failed to excite EUR traders at the later press conference.
Summing up Mr Draghi’s remarks, economist Frederik Ducrozet said:
‘[There were] some very small yet hawkish changes in the ECB’s introductory statement. Growth data “stabilised”. Uncertainty over the inflation outlook “receded”.
‘[Mr Draghi] mentions the negotiated component of wage growth as a new driver/support; this was also hawkish.’
Pound Sterling to Euro (GBP/EUR) Exchange Rate Rises on Weaker Single Currency
The Pound (GBP) has appreciated against the Euro (EUR) today, but this is primarily because the Euro is the weaker currency in the pairing.
The latest UK news has limited today’s GBP/EUR exchange rate rise – reports of plans to stockpile medicine for a ‘no-deal’ Brexit have rattled GBP traders.
Euro to Pound Exchange Rate Forecast: Are EUR/GBP Gains ahead on Eurozone Confidence Stats?
The Euro (EUR) has a chance to advance against the Pound (GBP) early next week, when a number of Eurozone confidence stats come out on Monday.
Forecasts for the confidence scores haven’t been universally positive, but the EUR/GBP exchange rate could still rise on some higher readings.
Levels of business confidence and service sector sentiment are both forecast to rise, but on the other side lower consumer and economic sentiment is predicted.
It is unclear which data will have the deciding influence on the Euro, but as Eurozone GDP growth is forecast on Tuesday the Euro rate could edge higher regardless.
Weekly GBP/EUR Exchange Rate Outlook: Can Pound to Euro Rate Rise on BoE Interest Rate Hike?
Next week’s biggest UK economic news will be Thursday’s Bank of England (BoE) interest rate decision; outside of this will be UK PMI activity readings for July.
The PMI readings will be out on Wednesday, Thursday and Friday, respectively covering manufacturing, construction and services.
The manufacturing and construction readings could damage the Pound if they show slower growth as forecast, but the most important stat is Friday’s services PMI.
If this shows sector growth as some analysts expect, the Pound could shake off any prior losses and rise sharply against the Euro.
The services sector is the single largest contributor to UK economic growth; expansion during summer (when growth is expected) would be good news for GBP traders.
In the midst of these PMI readings will be the BoE interest rate decision; a rate hike could send the Pound soaring while a freeze could drag the GBP/EUR rate down.
There is a third potential outcome – if the BoE hikes rates but suggests that additional near-term hikes are unlikely then GBP/EUR gains could be limited.