- EUR GBP close to 0.84 today – Mixed inflation rate results unsettle EUR investors
- Pound flat against many regular peers – Investors tense ahead of key UK jobs data
- Eurozone production results incoming – Major UK earnings data also out shortly
The Euro has trended in a tight range against the Pound so far today, with recent Eurozone data proving to be a mixed bag. While the Finnish inflation rate in August fell on the year, it rose on the month from a negative range. France’s finalised annual August inflation rate remained on the rise at 0.2%, while the monthly figure climbed from -0.4% to 0.3%.
Eurozone data out shortly will consist of the July industrial production results for the whole Eurozone, which are pessimistically predicted to fall on both the month and the year.
For the Pound, movements have been flat against a number of major peers, in the calm before the storm when the UK’s high-impact jobs data is announced shortly.
(Last updated September 14th, 2016)
The Pound’s condition gradually deteriorated yesterday due to August’s inflation rate figures, which proved disappointing to investors who had been anticipating a bounce towards the target 2% level.
Euro Exchange Rate News: ‘Protective’ Draghi Speech Boosted Confidence in Single Currency
The Euro managed to advance notably against the Pound (EUR GBP) by around 1% on Tuesday, which came along with rises of 1% against the Canadian Dollar (EUR CAD) and 1.3% against the South African Rand (EUR ZAR).
For the single currency, the day started off on an uncertain basis, with German and Spanish inflation rate results for August showing notable declines.
Elsewhere, the German ZEW current conditions figure for September fell while the German economic sentiment index for the same month remained at 0.5 instead of rising to 2.6 as predicted.
For the Eurozone-wide sentiment score, however, a rise from 4.6 to 5.4 was recorded, although this too fell short of forecasts.
More solid support was afforded later on, when ECB President Mario Draghi gave a speech. With a tone of unity and cooperation, Draghi stated of the single market that;
‘A free and single market is not anarchy: it requires that all its members are subject to the same laws and rules; and that they all have recourse to the same courts where those laws can be applied uniformly. Thus to protect the single market in all its forms, and the commitment to an open society which it represents, it has to be completed’.
Pound Sterling Crashed on Worsening Reaction to Flat UK Annual Inflation Rate
The Pound started off trading on a mixed note yesterday, but progressively lost ground over the course of the day to end trading with losses in excess of -1% being recorded against most peers.
The source of this growing discontent among investors were the UK’s inflation rate results for August, which showed a reprint at 0.6% on the year for the non-core index instead of the forecast rise to 0.7%. For the monthly printing, a rise from -0.1% to 0.3% was recorded.
The annual outcome shattered optimism among investors, who gradually came to realise over the course of the day that the Bank of England (BoE) was unlikely to raise the UK interest rate back up to 0.5% anytime soon.
Future EUR GBP Forecast: Will Falling UK Earnings Unsettle Investors Today?
The next economic announcements to watch out for will come from the UK, when the nation’s claimant count change, unemployment rate and average earnings including and excluding bonuses are announced.
Covering August, the claimant figure is predicted to show a small reduction of -0.8k cases, down from a previous -8.6k result.
The unemployment and earnings figures are both for July; unemployment is predicted to rise from 4.9% to 5%, while earnings are forecast to shrink in both fields.
Eurozone releases today will come shortly after the UK’s, consisting of the July industrial production results. Unfortunately for the Euro, losses are forecast on both the month and the year.
Recent EUR, GBP Exchange Rates
At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.8519 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.1740.