Euro to Pound Sterling (EUR/GBP) Exchange Rate Consolidates Declines
The Euro to Pound Sterling (EUR/GBP) exchange rate held on to its recent losses after the UK published trade balance and manufacturing production figures.
UK manufacturing production was shown to have increased by 0.7% on the month in November, more than twice the 0.3% rise expected.
Separate data showed that the UK’s goods-trade gap narrowed to 8.8 billion Pounds.
The Euro was also trending lower against the US Dollar, causing currency strategist Robert Rennie to comment; ‘How many hints do you need from Draghi that the ECB will potentially look at government-bond purchases? That continues to be a key driver of Euro weakness.’
Before the weekend the UK’s NIESR growth estimate for December came in at 0.6%, down from 0.7%.
In light of the recent slides in Manufacturing, Construction and Services PMI the easing in growth isn’t unexpected.
The GBP/EUR exchange rate was little changed by the report.
As the European session got underway the Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7800, down 0.2% on the day’s opening levels.
EUR/GBP Exchange Rate Slides on German Trade Figures
The Euro to Pound Sterling (EUR/GBP) exchange rate was able to advance as Germany published below-forecast trade figures.
The Euro to Pound Sterling (EUR/GBP) exchange rate brushed a low of 0.7796
German exports were shown to have fallen by a seasonally adjusted -2.1% in November, month-on-month, rather than dipping by the -1.0% expected.
Imports, meanwhile, increased by a seasonally adjusted 1.5% on the month in November – three times the 0.5% rise anticipated.
Germany’s seasonally adjusted trade surplus therefore narrowed from 20.8 billion Euros in October to 17.6 billion Euros.
The Euro to Pound Sterling (EUR/GBP) exchange rate achieved a high of 0.7825
French trade figures and industrial production data also disappointed, as did German industrial output numbers.
Output decreased by -0.1% due to easing construction activity and falling energy production.
According to The Guardian; ‘The markets are still being driven by expectations that the European Central Bank will launch a new quantitative easing programme, perhaps this month. Today’s signs of factory weakness shouldn’t make that any less likely.’
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast
The Euro to Pound Sterling (EUR/GBP) exchange rate could experience movement in the hours ahead as the UK publishes its manufacturing/industrial production figures, trade balance stats and construction output data.
Positive UK figures could give the Pound a boost against its European peer.
Investors will also be focusing on the UK’s growth estimate for December, due out at 15:00 GMT.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7806
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2808
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1813
The US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8463