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Pounds Euros Exchange Rate Slips from Two-Month-Highs as EUR Strengthens

European Union news

  • Pounds Euros Exchange Rate Slips from Weekly Highs – Hovers near key level of 1.17
  • Eurozone Data Fails to Support Single Currency – EUR weak despite sturdy German growth
  • GBP Update: UK Q3 Growth Stats Meet Expectations – Sterling slips regardless
  • EUR Forecast: Euro Trade to be Weak Through Friday – Shared currency lacks momentum to recover

Friday Sees Pounds Euros Exchange Rate Fall from Highs

While the Euro struggled to make a strong recovery rebound throughout the last week, it edged higher against major rivals the Pound and US Dollar on Friday as investors sold them from their highs in a bout of profit-taking.

At the time of writing the Pounds Euros exchange rate was on track to end the week closer to its opening levels and around half a cent below its weekly highs of 1.18.

Despite another strong week for the Pound, Friday showed that traders were not eager to buy the British currency up higher, instead opting to recover the Euro from its lows partially because of negative correlation with the weak US Dollar.

GBP EUR may have slipped back down to around 1.17 on Friday, but could advance again in the coming week if the week’s key Eurozone prints fail to impress investors.

(Previously updated 12:49 GMT 25/11/2016)

Friday’s Pounds Euros exchange rate movements saw the pair slipping from its Thursday levels as traders took profit from the Pound’s highs in a GBP selloff.

The day’s UK data failed to give the Pound any significant support, as the 2nd preliminary Gross Domestic Product (GDP) results simply met expectations and matched the first preliminary prints.

While the Euro remained weak, its recovery attempts were a little more solid in the morning as traders made use of the US Dollar’s light trade from Thursday’s Thanksgiving US holiday.

(Published 07:00 GMT 25/11/2016)

The Pounds Euros exchange rate fluctuated near its best levels in over two months on Thursday as UK markets continued to express relief and adjusted following this week’s Autumn Statement. The Euro continued to perform poorly due to a strong US Dollar, despite decent ecostats.

GBP EUR currently trades over a cent above the week’s opening levels of 1.16. While the pair initially struggled to hold its gains it surged again on Wednesday and by Thursday morning had touched upon the key level of 1.18 for the first time since early-September.

Pound (GBP) Holds Highs on Autumn Statement Relief

Sterling has trended up and down since markets opened for the week. The British currency surged on Brexit optimism on Monday but plunged on Tuesday due to concerns that the upcoming Autumn Statement would see the UK Chancellor of the Exchequer unleash a bearish surprise on the economy.

However, after the Autumn Statement was delivered, UK traders were largely relieved as the announcements did not contain anything concerning that wasn’t already known. As a result, Sterling was able to recover most of its Tuesday losses.

Investors were also cheered by news that the UK government planned to issue a considerable amount of debt for the sake of infrastructure and innovation work in the country for the next few years.

This included plans to bolster super-fast broadband in more parts of the country, which is a particularly good sign for small and medium businesses.

During Thursday trade, the Pounds Euros exchange rate trended a lot more flatly as it struggled to break through the key resistance level of 1.18. However, lasting market optimism from the Autumn Statement helped Sterling to hold near its highs.

Euro (EUR) Limp on Strong USD despite Sturdy German Growth

The Euro’s negative correlation with the US Dollar has been its biggest obstacle in the past week, as the lasting bullishness of the US Dollar has prevented the shared currency from really benefitting from any strong Eurozone ecostats throughout the week.

Due to the large amount of downside factors in Euro trade and the strength of the US Dollar, the shared currency simply hasn’t been appealing in the foreign exchange market over the last week despite the solid data.

Markit published better-than-expected PMI results for the Eurozone bloc and Thursday’s news that Germany’s economy had grown 1.7% year-on-year as expected in Q3 failed to give the Euro any notable support.

The downside factors in Euro trade this week include ongoing fears of rising populism within Eurozone nations, as well as increasing speculation that the European Central Bank (ECB) will be extending its easing measures in its policy meeting in two weeks’ time.

Pounds Euros Exchange Rate Forecast: Britain’s Q3 Growth Results to Drive GBP EUR Friday

After the Pounds Euros exchange rate held its ground throughout Thursday, it’s unlikely for the pairing to end the week below opening levels unless Friday’s UK data comes in well below expectations.

Friday’s European session will see the publication of Britain’s 2nd preliminary Q3 Gross Domestic Product (GDP) estimates, which are expected to meet the first preliminary figures.

Quarterly growth is expected to improve at 0.5%, with yearly growth at a solid 2.3%.

If this preliminary figure fails to meet expectations and indicates that growth is slowing more than expected, the Pound could fall from its highs as market concerns about the UK’s mid to long-term growth trends increase. A solid growth result or a better-than-expected result could see GBP extend its weekly rally however.

Other UK data published on Friday morning will include CBI’s November retail sales results.

The Euro on the other hand is unlikely to see a significant change in movement as the week draws to an end. With all the Eurozone’s most influential stats already published and none of them able to inspire Euro strength, it is unlikely Euro performance will suddenly improve on Friday.

As a result, this week’s Pounds Euros exchange rate could end the week above its opening levels and may even surpass the key level of 1.18.