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Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Edge Lower on 3.5-Year Low Eurozone Unemployment

GBP/EUR Conversion Rate Predicted to Trend Narrowly Even after British Consumer Confidence Wanes

The Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.3% on Friday afternoon.

Despite the fact that British economic data produced mixed results on Friday, the Pound is holding comparatively steady versus its major peers. This is likely to be due to improved Bank of England (BoE) rate hike bets amid speculation that the domestic labour market can withstand a fractional benchmark rate increase. Some traders are going so far as to say that the BoE will hike ahead of the Federal Reserve and certainly BoE policymakers have made it clear that they don’t feel tied to the North American central bank.

On Friday morning October’s Consumer Prices showed an unexpected drop from 3 to 2 despite predictions of a rise to 4. Analysts at GfK, who compiled the survey, were optimistic however stating that the drop in confidence was due to external concerns. ‘Good news on the domestic front -– with households lifted by wage growth, low interest rates and near-zero inflation -– is being tempered by concerns about our ability to shrug off the global downturn,’ GfK analyst Joe Staton said. In addition, October’s Lloyds Business Barometer advanced from 42 to 50.

The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3899.

EUR/GBP Exchange Rate Forecast to Trend Statically despite Rising Core Eurozone Consumer Prices

European economic data produced a mixed-bag of results today, but uncertainty regarding a Federal Reserve rate hike has seen quiet trade. The positive sentiment following the hawkish Federal Open Market Committee (FOMC) statement was somewhat juxtaposed against lower-than-expected third-quarter US growth. Ongoing uncertainty regarding the European Central Bank’s (ECB) policy outlook has also weighed on Euro trade today.

September’s German Retail Sales missed estimates on both a monthly and yearly basis, but September’s Eurozone Unemployment Rate dropped to just 10.8%; the lowest level in over three years. Additionally, October’s Eurozone Consumer Price Index met with estimates of a rise from -0.1% to 0.0% and Core Inflation bettered estimates of 0.9% with the actual result reaching 1.0% in October. If price pressures continue to rise ahead of the December ECB interest rate meeting, President Mario Draghi may consider delaying an expansion of the asset-purchase program.

The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3879 during Friday’s European session.

Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: US Personal Spending Data to Provoke Volatility

With an absence of further domestic data publications to provoke changes and with EUR/USD negative correlation, US data has the potential to provoke changes for the Pound Sterling to Euro (GBP/EUR) exchange rate. Should US data print positively it could support rate hawk hopes of a December hike, resulting in US Dollar appreciation. A stronger North American asset could cause the GBP/EUR exchange rate to advance.

The Pound Sterling to Euro (GBP/EUR) exchange rate reached a high of 1.3969 today.