Euro Pound (EUR/GBP) Exchange Rate Lifted by Eurozone Trade Surplus
The Euro Pound (EUR/GBP) exchange rate is trading at its highest level this week after the EU released the Eurozone’s latest balance of trade data.
The figure came in at €22.5bn, lengthening the previous surplus of €16.5bn and beating economist consensus that the figure would only increase by €1.5bn.
Furthermore, easing tensions surrounding the currency crisis in Turkey have for now allayed fears that the country’s financial upheaval might have knock-on effects in the Eurozone.
Euro (EUR) Exchange Rates Still Dependent on Turkey
Despite the decent growth the Euro (EUR) made this session, traders will still be watching developments in Turkey with a wary eye as the country works to turn its ill fortune around.
Last week, Turkish Finance Minister Berat Albayrak outlined a new economic model that Turkey would look to incorporate over the coming months, but his lack of detail left economists disappointed and hesitant to sow into the Euro.
Furthmore, additional US trade tariffs were laid on Turkish goods, further adding to the country’s woes.
Despite this, the Turkish Lira (TRY) continues to climb as it attempts to attain the levels it saw before its plummet last week.
Pound (GBP) Exchange Rates Weaken Against Euro (EUR) Despite Positive Retail Data
The Pound (GBP) is struggling against the Euro (EUR) regardless of some impressive domestic retail sales figures, which despite beating forecasts are not enough to compete with the Euro’s good form.
July’s retail sales figures increased from -0.5% to 0.7%, while the yearly figure increased to 3.5% from 2.9%.
It is understandable that this was not enough to outperform the Eurozone’s impressive trade surplus, with the EU data aiding the common currency in overpowering the struggling Pound.
Euro Pound (EUR/GBP) Exchange Rate Forecast: Brexit Negotiations Continue
The Euro Pound (EUR/GBP) exchange rate may find itself strengthening further as the week concludes, with Brexit talks being held today and tomorrow.
Should the UK and EU negotiators continue their stone-wall negotiation tactics, market sentiment may sour towards Sterling, lifting the Euro Pound exchange rate depending on the level of gloom expressed in headlines.
This may be the main factor influencing the Pound tomorrow, as the UK has no new data scheduled for Friday’s session.
Otherwise, Euro investors will be looking towards the bloc’s inflation figures tomorrow morning, which are forecast to increase year-on-year but decrease significantly in the month of July, from 0.1% to a forecast -0.3%.
Should this be the case, EUR may struggle to gain momentum at the start of the session.