The Pound Sterling (GBP) has fallen marginally against the Euro (GBP/EUR) today due to a fundamental lack of support coming from the day’s UK data; the Eurozone’s results, meanwhile, have offered a somewhat better picture for investors.
UK GDP Figures set to Decide Near-Future Movement
The next piece of information likely to shift the GBP/EUR exchange rate is tomorrow’s UK GDP posting, which still has the same predictions assigned to it.
The Pound Sterling (GBP) has fallen marginally against the Euro (GBP/EUR) today, mostly on account of an uncertainty regarding the impending German IFO surveys.
Eurozone Confidence to Open Today’s GBP/EUR Movement ahead of UK Loans Figures
The next pieces of data due to affect the Pound Sterling (GBP) and the Euro (EUR) are the German IFO surveys for Business Climate, Current Assessment and Expectations in October. At the time of writing, only declines in the scores had been forecast, but given last week’s surprising upsets that took place with Friday’s Eurozone CPIs which rose instead of falling as had been forecast, it seems only natural that it could be ‘all to play for’ today.
The Pound Sterling to Euro (GBP/EUR) exchange rate ended last week around the best rate in over a month, but results due out this week may unsettle the Pound’s prior advantage.
GBP/EUR Exchange Rate News: Retail Sales were Bright Spot for Sterling Movement Last Week
Last week, the Pound Sterling (GBP) reached a high of 1.3967 against the Euro (GBP/EUR) not seen since the end of August. However, the road to this advantageous position wasn’t smooth; only two notable economic releases took place and only one of these was of benefit to the Pound. The one that wasn’t was Wednesday’s set of governmental borrowing results, which showed little reduction in the amount loaned to the UK government during September.
The more beneficial data came on Thursday with the forecast-exceeding UK Retail Sales figures, which breached predictions in all categories to send the Pound on a rally. The Pound was also helped by political news: Chinese President Xi Jinping’s state visit to the UK resulted in a number of deals being struck, including a vast investment in the development of Hinkley Point C Nuclear Power Station.
ECB’s Draghi’s Speech Severely Damaged EUR/GBP Exchange Rate Last Week
The Euro (EUR) had a wider spread of data covering last week, although for the most part this worked against the common currency’s favour by printing negatively or otherwise acting as a detriment to the Euro. This was seen with the Eurozone Construction Output figures for August and the German Producer Prices for September, but the most prominent example came with European Central Bank (ECB) President Mario Draghi’s post-interest rate decision speech. In the speech, Draghi’s tone was excessively dovish and worse still, he articulated how willing the ECB was utilise further quantitative easing in the Eurozone if necessary.
A ray of hope came with Friday’s data, however, when most of the Eurozone and German PMIs covering Services and Manufacturing came out above forecasts of declines.
GBP/EUR Exchange Rate Forecast: Eurozone’s Larger Share of Data may Override Sterling Gains
This week the UK will have a few high-impact results likely to shift the exchange rate, although the Eurozone holds the majority in terms of quantity and quality.
UK GDP Data Forecast to Impact Pound Sterling (GBP) Exchange Rate
The UK Q3 GDP is due on Tuesday and while a no change has been predicted for the annual result from 2.4%, forecasts have been for a decline in the monthly result from 0.7% to 0.6%. Other UK data of note includes the September Mortgage Approvals figures and October CBI Reported Sales on Thursday.
The Eurozone will make input to the pairing with Wednesday’s German Unemployment results covering October, along with the German CPI and Eurozone CPI for October, which are spread over Thursday and Friday respectively.
GBP, EUR Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3911 and the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7188 at the close of the European trading session on Friday.