EUR/GBP Exchange Rate Rangebound as Eurozone GDP is Revised Down in Q3
The Euro to Pound (EUR/GBP) exchange rate held steady today, with the pairing currently fluctuating around €0.906.
The Euro (EUR) failed to make much headway against the Pound (GBP) following the release of the Eurozone’s final GDP data for the third quarter, which was revised lower to 12.5%.
Paul Hannon, an analyst at MarketWatch, explains:
‘Those revisions mean the Eurozone economy suffered a smaller loss of output over the six months from April through September than previously estimated. Economic output in the third quarter was 4.3% lower than in the same period a year earlier, having previously estimated it was down 4.4%.’
Nevertheless, the outlook for the Eurozone’s economy is becoming increasingly uncertain, with concerns that rising Covid-19 infections could jeopardise Germany’s economic recovery.
Today also saw the release of the latest ZEW Survey of the Current Situation for December. The figure fell below forecasts to -66.5, sparking concerns for the Eurozone’s largest economy.
According to the ZEW publication, the announcement of an ‘imminent vaccine’ had made market exports more confident about the nation’s economy.
Pound (GBP) Steady as UK Makes Concessions in Positive Steps Towards Trade Deal
The Pound (GBP) stabilised today following news that Downing Street had dropped its controversial and international law-breaking Northern Ireland protocol in UK-EU trade talks.
As a result, GBP investors have become more hopeful that progress could be made towards a post-Brexit trade deal with the European Union.
Ireland’s Foreign Minister Simon Coveney said that this could provide a ‘positive momentum’ for trade talks between the two sides.
Nevertheless, Prime Minister Boris Johnson has warned that securing a trade deal was proving ‘very, very difficult’.
In UK economic news, today saw the release of the latest BRC Like-for-Like Retail Sales, which rose slightly to 7.7%.
After last month’s lockdown retail sales struggled, with many shops closed under newly implement Covid-19 restrictions.
EUR/GBP Outlook: Could a Brexit Trade Deal Bolster Sterling This Week?
Euro (EUR) traders will be awaiting tomorrow’s release of October’s German Trade Balance data.
Any improvement in the outlook for the Eurozone’s largest economy would be EUR-positive.
Tomorrow will also see the release of November’s French CPI data. Again, any improvement in the French economy would benefit the single currency.
Brexit will remain firmly in focus this week, however, with any signs of a possible trade deal emerging buoying Sterling.