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Euro Pound Sterling (EUR/GBP) Exchange Rate Flat as German Investor Confidence Slumps to near Decade Low

Euro Pound (EUR/GBP) Exchange Rate Muted as German Recession ‘Looks Unavoidable’

The Euro Pound Sterling (EUR/GBP) exchange rate remained flat and the pairing is currently trading at an inter-bank rate of £0.8955.

The single currency remained under pressure on Monday as data revealed that investor morale in the bloc deteriorated further.

Sentix investor confidence fell to -5.8 in July, plummeting from -3.3 in June.

This was the lowest the index has fallen since November 2014.

Added to this, the sub-index for Germany slumped to the lowest in close to a decade, from June’s -0.7 to -4.8 in July.

Commenting on the German sub-index, Sentix Director, Patrick Hussy said:

‘The high dependence on exports and the Chinese sales market is increasingly becoming a burden and the trade dispute hangs like a sword of Damocles over the one-time poster boy of the Euro region.

‘A recession looks unavoidable.’

Euro (EUR) Flat as German Industrial Production Edges Up in May

On Monday, data revealed that German industrial production edged up by a higher-than-expected 0.3% in May.

This rise came following April’s downwardly revised slump of -2%.

However, year-on-year production slumped by a worse-than-forecast -3.7%.

Commenting on the data, Chief Eurozone Economist at Pantheon Macroeconomics, Claus Vistesen said this was a ‘decent’ set of numbers.

However, he believed the picture for the second quarter as a whole ‘still isn’t pretty’.

Brexit Uncertainty Leaves Sterling (GBP) Flat

Sterling continues to remain under pressure as Brexit uncertainties consume GBP as the Conservative leadership contest continues.

On Monday, former Brexit Chief, Philip Rycroft stated that we should all worry about a no-deal Brexit.

Speaking to the BBC, Rycroft who resigned from the position 18 months ago, said a no deal was ‘fraught with risk’.

He added:

‘This has been an extraordinary exercise to which the civil service is responding brilliantly well […] The planning I think is in good shape, absolutely […] but of course what that doesn’t mean is that there won’t be an impact from Brexit, and particularly a no-deal Brexit, because that is a very major change and it would be a very abrupt change to our major trading relationship.’

Euro Pound Outlook: Will Better than Expected UK GDP Buoy GBP?

Looking ahead to Tuesday, the Pound (GBP) could edge up against the Euro (EUR) following the release of the British Retail Consortium’s (BRC) like-for-like retail sales.

If June’s like-for-like sale rebound, it could provide Sterling with an upswing of support.

Meanwhile, looking ahead to Wednesday the Pound could rise against the single currency following the release of the UK GDP.

If GDP rises higher than expected in May, the Euro Pound (EUR/GBP) exchange rate could slump.