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Pound Euro (GBP/EUR) Exchange Rate Sinks as Eurozone’s Inflation Data Improves

GBP EUR exchange rate outlook

GBP/EUR Exchange Rate Falls as Eurozone’s Trade Balance Exceeds Expectations

The Pound Euro (GBP/EUR) exchange rate fell by -0.2% today and is currently trading around €1.1530 on the inter-bank market.

The Euro (EUR) gained on the weaker Pound (GBP) today following the publication of the Eurozone’s Core Consumer Price Index figures for March, which rose above forecast at 1.3%.

These were followed by the Eurozone’s seasonally-adjusted trade balance figures for February, which increased above the expected €14.7bn to €19.5bn.

The European Union’s trade surplus with the United States had increased at the beginning of 2019, while it showed a deficit with China.

Many analysts, however, fear that this could exacerbate economic tensions.

The Pound, meanwhile, fell against the Euro today following the printing of the year-on-year UK Consumer Price Index figures for March, which remained unchanged at 1.9%.

This was blamed, by the Office for National Statistics (ONS), on rising prices for motor fuels and clothing, which had increased the cost of living during March.

Many Pound traders will be awaiting the speech by the Governor of the Bank of England (BoE), Mark Carney, today, and with any indications that the UK economy is recovering following the recent extension to Brexit, this could see Sterling rise.

GBP/EUR Exchange Rate Sinks as South East Annual House prices Fall to Lowest in Seven Years

The ONS also reported, however, that house prices across the South East had decreased by 1.8% yearly to February.

Mike Hardie, the Head of Inflation at the ONS, commented:

‘Annual house price growth has slowed to the lowest rate in close to seven years.’

‘Growth in Wales and the west of England was offset by a sustained fall in London and falling prices in the South East for the first time since 2011.’

In Brexit news meanwhile, the Labour leader Jeremy Corbyn has become increasingly critical of cross-party talks between the Conservatives and the Labour party, saying that many MPs wanted to ‘do a deal with Donald Trump’.

Corbyn added:

‘We’ve lost a lot of time by the dithering of the Government on bringing issues to Parliament.’

This has weighed on market confidence in the Sterling today, and with many MPs inactive over the parliamentary Easter recess, Brexit uncertainty has increased.

GBP/EUR Forecast: Sterling Could Weaken if Cross-Party Talks Break Down

Euro traders are looking ahead to the printing of the German Markit Manufacturing PMI figures for April tomorrow, which are expected to improve.

These will be followed by the Eurozone’s Markit PMI Composite figures for April.

Pound investors, meanwhile, will be awaiting the UK’s retail sales figures for March tomorrow, and with any signs of improvement, this could buoy the Pound to Euro exchange rate.

The GBP/EUR exchange rate will remain sensitive to Brexit developments, and if there should be any signs of cross-party talks breaking down, this would dampen market confidence in the Pound, seeing the pairing sink further.