- GBP EUR falls to 1.16 – Sterling softens overall on declining appeal
- UK data to focus on BoE today – Central bank speech and FPC meeting due
- Euro fluctuates after morning’s data – Rising Dutch confidence offset by falling PPI prices
The Pound Euro exchange rate downtrend continued as the week progressed, with the GBP EUR pairing sliding to trade in the region of 1.16. Demand for Sterling is weaker across the board with Brexit fears on the rise and the prospect of a rate cut from the Bank of England (BoE) on the horizon.
The Pound has lost ground to the Euro during trading so far today, having slipped marginally against the Euro and made more notable losses in other pairings. UK domestic data has been non-existent so far today, with the only expected contributions expected to come from the Bank of England Financial Policy Committee meeting and a speech from BoE official Andrew Hauser.
Euro movements have been slightly more positive, with recent data from the Netherlands serving to push the single currency against most of its usual rivals. Notably, the Dutch consumer confidence result for September has climbed from 2 points to 8, while on the opposite side of this, German PPI in August has fallen into negative ranges on both the month and the year.
Looking ahead, Eurozone news today is predicted to focus on Greece’s pessimistically predicted current account for July, as well as Belgium’s consumer confidence figure for September, which is forecast to worsen in the afternoon.
(Last updated September 20th, 2016)
Euro movements over Monday were poor on the whole, due to waning investor sentiment overriding more positive economic announcements.
Pound Exchange Rate News: Rightmove House Price Stabilisation Bolstered GBP
The Pound was in high demand against most of its regular peers over the course of trading yesterday, due mainly to the outcome of September’s Rightmove house prices.
While no solid predictions had been made, a recovery was seen on the month from -1.2% to 0.7%, while on the year, a contrasting slip from 4.1% to 4% was recorded.
While this bolstered the Pound to 1.16 against the Euro and 1.30 against the US Dollar, there were more widespread concerns that the cost of housing in the nation was rapidly rising out of control.
Of this sentiment was Legal and General Mortgage Club Director Jeremy Duncombe, who said;
‘House prices are continuing their unstoppable climb to overwhelming, and for many aspirational first time buyers, unreachable heights. The government can hopefully use the Autumn Statement to deliver a clear plan of action which prioritises the need to boost the supply of affordable homes’.
Euro Losses Stemmed from Falling Current Account and Bundesbank’s ECB Defence
The single currency was in low demand over Monday, owing to prolonged investor pessimism about the morning’s current account results for July, as well as a later report from German central bank Bundesbank.
In the former case, the Eurozone-wide account contracted on the month from 39.1bn to 31.5bn, while in the more controversial latter, Bundesbank’s September report estimated that little actual inequality had been caused by the European Central Bank’s (ECB) latest policy measures.
In more positive news, the July annual construction output figure for the Eurozone rose from 0.6% to 3.1%.
Future GBP EUR Forecast: Could BoE Meeting Result in Rate Cut Talks?
The next UK data releases expected will arrive over the course of this afternoon, when Bank of England (BoE) official Andrew Hauser gives a speech; in addition, the BoE is holding its Financial Policy Meeting, though the results of this are not expected to be known until a statement is made on Thursday.
Regardless of when the results are known, investors and economists alike are sure to be speculating on whether the issue of interest rate cuts will be raised, having been discussed last week as part of the BoE’s September minutes.
From the Eurozone, Germany’s PPI for August will be announced shortly; this has been forecast to print negatively on the month and the year. Following on from this will be Greece’s current account outcome for July, which is predicted to show a slide into deficit from 1.005bn to -0.8bn.
Recent GBP, EUR Exchange Rates
At the time of writing, the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.1678 and the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.8565.