The Euro (EUR) has fallen by -0.2% against the Pound Sterling (EUR/GBP) today; this comes in spite of the annual UK inflation for August falling from 0.1% down to 0%.
ZEW Survey may Unsettle Current Sterling Uptrend in Pairing
As no real change has occurred due to this drop in results, it can be assumed that speculators are optimistically referring back to the last Bank of England (BoE) minutes release, which contained forecasts by BoE policymakers that the UK inflation rate would remain close to 0% for several months before picking up at the end of the year. As today’s result has apparently confirmed part of this prediction, a repeat posting of 0% or 0.1% in the future is unlikely to ruffle the feathers of investors in the Pound (GBP).
The Euro (EUR) has the potential to undo its current disadvantage in the pairing soon, as the German ZEW Survey of Economic Sentiment is out today. Unfortunately, expectations are for a decline from 25 points to 18.3, but this may have the double-edged effect of bolstering the common currency if a drop is better than expected (or if au unlikely rise occurs).
The Euro (EUR) has failed to break out of the current downtrend it is experiencing against the Pound Sterling (EUR/GBP), regardless of the fact that the Eurozone Industrial Production results both exceeded expectations.
Little Change Predicted in Pairing until UK Inflation Data Tomorrow
The Euro’s (EUR) only major news of the day has come out positive, but this has been unable to put the common currency is an advantageous position against the Pound (EUR/GBP). The Eurozone annual and monthly Industrial Production results for July showed a rise from -0.4% to 0.6% for the monthly result and an increase from 1.2% to 1.9% in the annual variant, against forecasts of a slowdown to 0.7%.
No further related data releases are planned for today, so the next affecter of the pairing will be the UK CPIs for August, out tomorrow morning. Predictions have not been positive, therefore accurate forecasts could see the Pound (GBP) lose its current 0.3% advantage against the Euro (GBP/EUR).
The Euro to Pound Sterling (EUR/GBP) exchange rate dipped today ahead of a very quiet news day for both the single currency (EUR) and the Pound (GBP).
EUR/GBP Exchange Rate News: Euro Prints in the Doldrums ahead of Industrial Production Figure
The Euro (EUR) has had a fairly uninspiring performance today, posting losses of -0.2% against the Pound Sterling (EUR/GBP) and -0.3% against the Japanese Yen (EUR/JPY). This has been matched by gains of 0.2% against the Swiss Franc (EUR/CHF) and 0.6% against the South African Rand (EUR/ZAR).
This insipid showing has come mainly from a lack of significant Eurozone data results today, with the main economic publication still to come. Today’s already-released figures come from Italy, with the monthly Italian inflation rate rising from -0.1% to 0.2% and the annual variant seeing stagnation of 0.2%.
GBP Forecast: Sterling comes out Swinging on Vapours of Positive BoE Minutes Last Week
The Pound Sterling (GBP) has had a similar performance to the Euro (EUR) today, rising against most of its rivals and seeing few losses by comparison. The Pound’s gains today include rises of 0.2% against the Euro (GBP/EUR), 0.4% against the Swiss Franc (GBP/CHF) and the Swedish Krona (GBP/SEK), 0.6% against the Russian Ruble (GBP/RUB) and over 0.8% against the Israeli New Shekel (GBP/ILS) and the South African Rand (GBP/ZAR). Losses have been fairly minor, comprised chiefly of a narrow trending against the Japanese Yen (GBP/JPY) and -0.4% against the Hungarian Forint (GBP/HUF) and the Hong Kong Dollar (GBP/HKD).
This positive performance has not come from any related economic releases, given that the earliest Sterling data of the week comes tomorrow. Rather, the Pound has been helped tremendously today by a continuing wave of optimism triggered by the Bank of England’s (BoE) overall positive forecast for the UK economy last week and the news today that Monetary Policy Committee (MPC) member Martin Weale believes that UK interest rates should rise ‘relatively soon’. This has been helped by a statement from fellow MPC member Kristin Forbes last week, who predicted that the UK rate would need to rise ‘sooner rather than later’. Most recently, the ‘Brexit’ concerns induced by the election of supposed Eurosceptic Jeremy Corbyn as Labour’s new leader have been placated by Labour’s new shadow foreign secretary Hilary Benn, who has declared that his party ‘will be campaigning to remain in the European Union…under all circumstances’.
Exchange Rate Forecast: EUR/GBP may Dive if predictions of Eurozone Industrial Slowdown come True
As mentioned earlier, today is a very slow news day for both the Euro (EUR) and the Pound (GBP); the only notable economic release is the Eurozone annual and monthly Industrial Production data for July. Forecasts have the more important annual figure dropping from 1.2% to 0.7%, while the monthly variant is expected to rise from -01.4% to 0.3%.
Current EUR, GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7340 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3626 today.