EUR/GBP Exchange Rate Rangebound, French Industry on ‘Sound Footing’
The Euro Pound (EUR/GBP) exchange rate held steady this morning, with the pairing currently trading around £1.187 after the French industrial output figure for October beat expectations and rose to 0.4%.
The data comes after last week’s Germany’s production figures – which showed industrial output in the Eurozone’s largest economy slow down 1.7% – further indicated an extended slowdown of manufacturing in the bloc.
Analysts at Reuters commented:
‘The data offer evidence that France’s industrial base began the final quarter of the year on a sound footing, in line with recent confidence surveys.’
‘French manufacturers have reported in surveys like the monthly purchasing managers index that they are seeing decent demand despite trade tensions and slower global growth.’
The Euro (EUR) failed to rise against Sterling following today’s release of Germany’s ZEW Survey into Economic Sentiment, which beat forecasts and rose from -2.1 to 10.7.
GBP/EUR Exchange Rate Steady, UK GDP Falls Below Forecasts
The Pound (GBP) failed to gain on the Euro (EUR) following today’s release of the UK GDP figure for October, which fell below forecasts at 0%.
A Spokesman for the Office of National Statistics (ONS) commented:
‘The UK economy saw no growth in the latest three months. There were increases across the services sector, offset by falls in manufacturing with factories continuing the weak performance seen since April.
‘Construction also declined across the last three months with a notable drop in house building and infrastructure in October.’
Today also saw the UK industrial production figure fall by -1.3% in October, further indicating a stagnating British economy ahead of the New Year.
UK construction output down -0.3%q/q in the 3 months to October. Biggest drags came from repairs and maintenance and private house building. Office and factory & warehouse building provided the biggest boosts. pic.twitter.com/OMJKZUVWJO
— Rupert Seggins (@Rupert_Seggins) December 10, 2019
Despite today’s weaker-than-expected economic data, the GBP/EUR exchange rate remained relatively unmoved due to political developments remaining firmly in focus ahead of Thursday’s general election.
EUR/GBP Outlook: UK General Election in Focus
Pound (GBP) investors will be looking ahead to Thursday’s parliamentary election, with any signs before then of the Labour Party narrowing their lead on the Tories likely weakening the Pound on heightened fears of a hung parliament.
Euro (EUR) traders, meanwhile, will be awaiting Thursday’s release of Germany’s Harmonized Index of Consumer Prices for November, with the year-on-year figure expected to hold at 1.2%.
Thursday will also see the European Central Bank (ECB) announce its interest rate decision, which is expected to remain at 0%.
However, any dovish commentary from the ECB over the Eurozone’s slowing economy would prove EUR-negative.