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Euro Pound (EUR/GBP) Exchange Rate Muted as UK House Price Growth Strikes a Five-Year Low

EUR/GBP Exchange Rate Flat as UK House Price Growth Slows

The Euro Pound (EUR/GBP) exchange rate is trading narrowly this morning as markets react to the UK’s latest house price figures.

At the time of writing, the EUR/GBP exchange rate is virtually unchanged from this morning’s starting rate, but still remains up from the week’s opening levels.

Pound Sterling (GBP) Exchange Rate Clipped by Slowdown in UK House Prices

The Pound (GBP) is struggling to find its feet this morning as the release of the UK’s latest house price figures undermines the currency.

According to data published by Nationwide, annual house price growth slowed from 2.4% to 2% in June, denting Sterling sentiment.

This was the slowest pace of growth in five years, and appeared to be driven by growing uncertainty in the build up to Brexit as well as consumers continuing to tightening their purse strings following the fall in wages last year.

The outlook also looks to be equally gloomy, with analysts suggesting that buyers will continue to hold off committing to a mortgage at this time.

Jonathan Samuels, CEO of Octane Capital said:

‘With Brexit on the horizon, households feeling the pinch and interest rate uncertainty lingering, a lot of prospective buyers are sitting tight.’

Euro (EUR) Exchange Rate Steady as German Political Stability in Focus

At the same time the Euro (EUR) also remains subdued this morning, with EUR investors staying put as they eye the political situation in Germany.

Angela Merkel’s position as Chancellor has begun to look increasingly tenuous in recent weeks as her coalition government shows cracks amid a dispute over immigration in the EU.

While things appear to have quietened this week, markets are still fearful that underlying fractures within the fledgling government could see it collapse in the foreseeable future if something more is not down by Merkel.

EUR/GBP Exchange Rate Forecast: Will Robust German Inflation Bolster the Euro

Following a drought of Eurozone data at the start of the week, the EUR/GBP exchange rate may finally be able to dictate its own movement on Thursday following the release of Germany’s latest CPI figures.

Economists forecast tomorrow’s figures will reveal German inflation remained solid in June, holding above 2% for only the second time in over a year.

How much of an impact this will have on the Euro remains unclear however, especially given the European Central Bank’s (ECB) recent pledge to leave interest rates on hold until well into 2019.

Meanwhile in terms of the Pound the focus is likely to be on the UK’s final GDP reading for the first quarter, with GBP investors looking for any hints that growth will be revised up from an abysmal 0.1% at the start of 2018.