Euro to Pound Sterling (EUR/GBP) Exchange Rate Softens as Industrial Production Slips
The Euro to Pound Sterling (EUR/GBP) exchange rate consolidated earlier declines on Friday as Germany’s Industrial Production report disappointed expectations.
Production had been expected to fall by -0.3% on the year in December, but it actually slumped by -0.7% following a monthly increase of just 0.1%.
A more sturdy month-on-month advance of 0.4% had been anticipated.
If today’s UK trade balance data is encouraging, the Pound could extend gains in the hours ahead.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trading in the region of 0.7475
EUR/GBP Exchange Rate Drops as Greek Negotiations Crumble
Although the Euro recovered 0.4% against the Pound on Thursday following the publication of a mixed bag of data for the Eurozone, the Pound was still trading close to a 7-year high against the Euro.
The GBP/EUR pairing had previously climbed back above 1.34 as a result of deteriorating relations between Greece and its creditors.
However, the Euro was modestly supported by impressive factory orders data for Germany.
The nation’s Retail PMI also showed improvement, climbing from 51.7 to 52.3.
Given that the Bank of England isn’t expected to take any action at today’s meeting, the central bank’s interest rate announcement isn’t likely to have much of an impact on EUR/GBP trading.
The Euro to Pound Sterling (EUR/GBP) exchange rate is trading in the region of 0.7489
EUR/GBP Exchange Rate Softens
As the European session progressed, the Euro extended its decline against the Pound to -0.7%.
The EUR/GBP pairing continued trending in a weaker session following the publication of surprisingly upbeat retail sales figures for the Eurozone.
It had been predicted that retail sales would stagnate on the month in December but they actually increased by 0.3%
The Euro to Pound Sterling (EUR/GBP) exchange rate was trading in the region of 0.7506 while the Pound Sterling to Euro (GBP/EUR) exchange rate climbed back above 1.33 to trade in the region of 1.3320.
However, the Pound could lose some of today’s gains in the run up to the Bank of England’s interest rate announcement as inaction from the central bank won’t be lending Sterling any support.
EUR/GBP Exchange Rate Dips after Services PMI
The UK’s impressive Services PMI left the Euro trading in a softer position against the Pound on Wednesday.
Rather than increasing from 55.8 to 56.3, as expected, the measure of the UK’s services sector jumped to 57.2.
The report showed strong increases in both activity and new business.
According to Markit economist Chris Williamson; ‘The January PMI surveys signalled a reassuringly robust start to the year for the UK economy, indicating a quarterly rate of GDP growth just over 0.5%. The data will allay fears that the economy is slowing sharply, having merely seen growth cool during the winter to a more sustainable pace.’
Sterling strengthened off the back of the report and the Euro to Pound Sterling (EUR/GBP) exchange rate fell to 0.7548
The Euro to Pound Sterling (EUR/GBP) exchange rate could extend declines in the hours ahead if the UK’s Services PMI impresses.
EUR/GBP Exchange Rate Declines, Fluctuations Forecast
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced on Tuesday in spite of the UK publishing unexpectedly strong construction data.
The common currency was bolstered against the majority of its most traded counterparts as the Greek government dropped its hard-line stance on renegotiating the terms of the nation’s bailout.
Syriza, the anti-austerity party voted into power at the end of January, has stopped asking for its foreign debt to be reduced and has instead asked that the debt might be swapped out for growth-linked bonds.
The Euro to Pound Sterling (EUR/GBP) exchange rate achieved a high of 0.7574
The development saw gold decline, copper advance and stock markets rally.
According to one industry expert; ‘The market is beginning to see signs of some stability coming into oil and the Greek situation seems to be tilting toward the side of what the market is looking for, which is a retreat from its call for a debt write-down.’
However, the Euro to Pound Sterling (EUR/GBP) exchange rate began the European session in a slightly softer position as investors awaited the publication of the UK’s Services Purchasing Managers Index.
The Euro to Pound Sterling (EUR/GBP) exchange rate fell to a low of 0.7548
So far this week both the UK’s Manufacturing and Construction PMI reports have come in well above expected levels, indicating that the nation’s economy got off to a sturdy start to the year.
As the services sector accounts for around 70% of total economic growth, today’s report is the most important of the three.
Economists have forecast that the Services PMI advanced from 55.8 to 56.3.
If that proves to be the case, or if the gauge comes in even more strongly, the Pound could extend its advance against the common currency in the hours ahead.
Euro to Pound (EUR/GBP) Exchange Rate Forecast
Investors with an interest in the EUR/GBP pairing will also be focusing on the Eurozone’s retail sales figures.
Sales are believed to have stagnated in December on the month following growth of 0.6% in November.
If the data disappoints it may push the Euro lower.
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7550
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3233
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1444
The US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8738