Euro to Pound Exchange Rate’s Recovery Short-Lived as Euro Support Limited
Yesterday saw the Euro to Pound Sterling (EUR/GBP) exchange rate put in a fairly solid recovery from Monday’s plunge, but the pair has been unable to recover all of this week’s losses. Investors are hesitant to buy the Euro (EUR) too much ahead of key data.
While EUR/GBP has avoided shedding all of last week’s gains, the pair has still slipped from the week’s opening levels of 0.8588.
EUR/GBP spent yesterday recovering from a 6-month-low of 0.8531, but the pair’s recovery was only modest and at the time of writing is trending near the level of 0.8572.
While Eurozone data has been decent this week, it has not been enough to keep the Euro appealing. Investors have been hesitant to sell the Pound (GBP) too much ahead of upcoming UK polls.
Euro (EUR) Exchange Rates Avoid Losses as Eurozone Consumer Confidence Appears to Improve
The Euro (EUR) recovered yesterday, but its gains have been limited due to lingering concerns about the Eurozone’s economic outlook as well as strength in rival currencies like the Pound and US Dollar (USD).
The Euro was able to hold its ground a little more easily today however, as France’s November consumer confidence results beat forecasts. The figure was expected to slow from 104 to 103, but instead unexpectedly improved to 106.
It followed yesterday’s stronger than expected German consumer confidence stats.
Hopes that improving Eurozone consumer confidence will help to boost economic activity and help the bloc to recover from months of slowdown kept the shared currency from tumbling back towards its lows.
Pound (GBP) Exchange Rates Lack Drive as Markets Anticipate Fresh UK Polls
A large part of the Euro to Pound (EUR/GBP) exchange rate’s recovery yesterday was reaction to fresh UK polls, showing that Britain’s opposition Labour Party was gaining and closing the gap on the ruling Conservative Party’s lead.
With two polls in two days showing the Labour Party on the up, investors became anxious that a hung Parliament was still a possible outcome of next month’s election.
A hung Parliament could lead to months more Brexit uncertainty and would worsen the perceived chances of a no-deal Brexit.
Investors had been hoping for a Conservative Party majority that would help the UK government push through its relatively soft Brexit plan sooner rather than later.
The Pound was sold on these polls, and investors are hesitant to move too much on the British currency today amid anticipation for further polls expected in the coming days.
Euro to Pound (EUR/GBP) Exchange Rate Investors Await Eurozone Data and UK Polling
The Euro to Pound (EUR/GBP) exchange rate’s movement today is limited, but the pair could still be in for big movements towards the end of the week depending on upcoming data and political developments.
The week’s most influential Eurozone ecostats are still ahead, with slews due tomorrow and Friday.
Thursday’s Eurozone data includes Eurozone confidence stats from November and German inflation rate projections for November.
Friday will round out the week with key figures including German retail sales and unemployment, French growth rate and inflation stats, and Eurozone inflation and unemployment stats.
If notable figures beat expectations, the Euro could see stronger support towards the end of the week. However, even in this case EUR/GBP could still be heavily influenced by surprising developments in UK politics.
If upcoming election polling continues to show that the opposition Labour Party is closing the gap on the Conservatives, the Euro to Pound (EUR/GBP) exchange rate could see gains amid fresh concerns of UK political uncertainty.