Pound Trims Gains Vs Euro with BoE Decision Ahead
The Pound to Euro exchange rate slipped slightly as European markets opened on Thursday and investors focused on upcoming Eurozone inflation figures and the Bank of England’s (BoE) latest interest rate decision.
With the Eurozone inflation stats expected to show improvement and the BoE likely to maintain a dovish attitude towards interest rate adjustments, the GBP/EUR exchange rate could extend losses as trading continues.
That said, if the CPI data for the currency bloc disappoints or the BoE uses this week’s UK inflation report to become more upbeat, the Pound could recover ground.
ECB Commentary, Eurozone Production Slump Leaves GBP/EUR at 1.25
Although ‘Brexit’ concerns have increased as a result of the IMF’s warnings and the latest opinion poll putting the ‘leave’ camp ahead, the Pound Sterling to Euro (GBP/EUR) exchange rate was able to hold the 1.25 level as ecostats from the Eurozone disappointed.
Industrial production in the currency bloc was shown to have fallen by -0.8% on the month in February (worse than the -0.7% dip expected). Year-on-year industrial production printed at 0.8% rather than the 1.3% anticipated.
Meanwhile, ECB official Klass Knot asserted that the central bank is in ‘new territory’ with monetary policy.
- Morning’s UK inflation rate data exceeds forecasts
- Euro fluctuates on German CPI stats
- Sterling advances in spite of unresolved tax issues
- Talks on UK steel industry could shift Pound’s appeal later on
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced on Tuesday thanks to better-than-expected UK inflation data, although Sterling’s performance in other pairings was less impressive.
UK Economic News: Rising UK Inflation Rate and Increased Commons Activity moves GBP
The Pound (GBP) has advanced overall against its peers today, supported by the earlier announcement of the UK inflation rate data for March. Above-forecast rises were recorded on the month and the year for the base and core fields, although these nonetheless remained below the Bank of England’s (BoE) 2% target.
A recent detracting fact for the Pound has been the unclosed nature of the nation’s pressing tax issues; yesterday, the PM avoided digs at his alleged evasion of inheritance tax by accusing his opponents of supporting the unpopular measure.
In other developments, another source of instability to the Pound was City of London Corporation Policy Chairman Mark Boleat, who estimated that a ‘Brexit’ would have a significant impact:
‘The uncertainty would hit the London market, the UK economy but also the global economy. The detrimental effects on the exchange rate – already apparent – interest rates, credit ratings, inward investment and economic activity generally would certainly trickle down to the consumer’.
The Pound has risen by a small amount against the Euro (GBP/EUR) today and has recorded greater gains of 0.5% against the US Dollar (GBP/USD) and the Omani Rial (GBP/OMR). However, a loss has also been seen of -0.5% against the Australian Dollar (GBP/AUD).
Euro (EUR) Mixed Today after Confirmation of German Inflation Stats
The Euro (EUR) has made uncertain movement today, having risen by 0.5% against the Japanese Yen (EUR/JPY) but dropped by -0.2% against the Pound Sterling (EUR/GBP) and -0.6% against the Australian Dollar (EUR/AUD).
Single currency movement today has primarily been decided by the outcome of the finalised German inflation rate figures for March, which have remained stagnant in positive ranges on the month and the year.
Future UK and Eurozone Forecast: Eurozone Production Stats out Tomorrow
The near-future is set to be limited in terms of high-impact UK and Eurozone data, with the most notable Eurozone contribution being tomorrow morning’s positively-predicted February industrial production results for the month and the year.
Pound movement may come from the Bank of England (BoE) credit conditions survey, that is also due in the morning.
Outside of this, the GBP/EUR pairing could also be affected by any comments that are made regarding the UK steel industry in the House of Commons today.
Current GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2559 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7963 today.