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Pound Euro (GBP EUR) Stumbles as Eurozone Data Proves Positive

  • Pound Euro Slides Back to 1.0847 – Euro Pound Climbs to 0.9227
  • German Unemployment Drops – Euro Bolstered
  • UK Consumer Confidence Beats Forecast – Fails to Propel Sterling

The Pound Euro exchange rate’s rally abruptly ended this morning in the wake of a few notable data releases for the UK and Eurozone.

For starters, unemployment in Germany extended its decline into August, with the seasonally adjusted jobless figure falling by 5k and demonstrating that the Eurozone’s largest economy remains on a positive footing before the general elections.

The forecast for this figure – decided through a Bloomberg survey – was a drop of 6k, but the impact of the report was still positive.

Detlef Scheele, Labour Agency Head surmised:

‘The labour market continues to develop favourably. Strong employment growth continues and demand from companies for new employees continues to be high’.

UK Consumer Confidence Rises, Fails to Bolster Pound (GBP)

Consumer confidence in the UK jumped slightly in August despite forecasts that maintained a negative outlook for the UK economy due to stagnating Brexit negotiations.

The Gfk consumer sentiment index for the UK increased to -10 over August, slightly better than the one-year low demonstrated in July and beating the consensus of -13.

Whilst there was a rise in confidence, the reading as a whole remains negative, meaning that more people surveyed expressed negative sentiments about the economy’s future than positive. The Pound did not see much movement as a result, with investors far more concerned with the positive data prints coming from Germany and the Eurozone as a whole.

Eurozone Inflation Flash Estimates Beats Expectations, Cements GBP EUR Fall

Today’s Eurozone flash estimate inflation figures for August beat expectations, with headline inflation climbing to 1.5% year-on-year, up from the previous month’s 1.3% reading and beating the forecast of 1.4%.

The core CPI estimate, on the other hand, held steady at 1.2% in August, slightly lower than the 1.3% predicted.

These figures have propelled the Euro even higher, pushing GBP EUR back down towards its recent 8-year lows.

GBP EUR Forecast: Markit PMI’s and Eurozone GDP Figures on the Horizon

This week has remained fairly sparse in regards to data prints relating to the Pound, though it will conclude tomorrow with the release of the UK Markit manufacturing PMI for August, which is currently forecast to jump from 55.1 to 55.5; expressing positive sentiment for the manufacturing sector.

The data for the Eurozone, however, consists of heavier hitters, with GDP figures due for release for Italy and Greece, along with Markit manufacturing PMI prints for the bloc as a whole. Indeed, the Markit manufacturing composite figure is, quite notably, expected to jump from 56.6 to 57.4, a leap that could push the Pound Euro exchange rate even lower.