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Euro Pound (EUR/GBP) Exchange Rate Steady, UK Avoids Recession in Third Quarter


EUR/GBP Exchange Rate Rangebound, UK GDP Improves in Third Quarter

The Euro Pound (EUR/GBP) exchange rate held steady this morning, with the pairing currently trading around £0.86. Sterling failed to gain against the Euro (EUR) after Britain avoided a Brexit-related recession today, with the UK’s GDP figure growing by 0.3% in the third quarter.

Analysts at Bloomberg were downbeat however, saying:

‘Brexit stockpiling has led to volatility in output this year but the underlying picture is one of an economy that has lost momentum amid the turmoil convulsing British politics.’

The GBP/EUR exchange rate remained unmoved, with the UK’s flagging industrial and manufacturing sector also coming under strain in September.

Sterling also struggled to gain after the ratings agency Moody’s warned that it could slash the UK’s credit rating.

The agency stated:

‘The increasing inertia and, at times, paralysis that has characterised the Brexit-era policymaking process has illustrated how the capability and predictability that has traditionally distinguished the UK’s institutional framework has diminished.’

EUR/GBP Exchange Rate Flat, German Technical Recession Fears Haunt European Markets

The Euro (EUR) remained unmoved against the Sterling today, with the single currency being held back by ongoing fears over a possible technical recession for Germany, the Eurozone’s powerhouse economy.

Carsten Brzeski, Chief Economist at ING, commented:

‘With [last week’s German] data, a technical recession is not yet a done deal [but] the fact remains that the German economy has been in de facto stagnation for more than a year. This is clearly nothing to become too cheerful about.’

Euro (EUR) traders have overlooked Germany’s improving trade figures in September, with the economy now suffering from ongoing uncertainty surrounding the US-China trade war as well as falling demand for automobiles, one of Germany’s largest sectors.

With no notable European economic data due out today, Euro (Euro) traders will be looking ahead to this afternoon’s speech by Yves Mersch, a member of the European Central Bank’s executive board.

Any dovish comments about the Eurozone’s economy could weaken the EUR/GBP exchange rate.

EUR/GBP Outlook: German Economic Data in Focus

Euro (EUR) traders will be looking ahead to tomorrow’s release of November’s German ZEW Survey into economic sentiment. If optimism for the German economy continues to deteriorate, we could see the EUR/GBP exchange rate fall.

Sterling investors will be awaiting tomorrow’s release of September’s ILO unemployment rate, which is expected to hold steady at 3.9%.

Tomorrow will also see the release of Britain’s average earnings figure for September, which is expected to improve by 3.8%.

The EUR/GBP exchange rate will likely be determined by German economic data this week, with any further signs of the Eurozone’s largest economy falling into recession seeing the Euro plummet against the Pound.