Pound to Euro Avoids Two-Month-Worst as Eurozone Outlook Becomes Cloudier

Pound to Euro Exchange Rate Rebounds Slightly as Euro Hit by Strength in Rivals

UPDATE: Market concerns about worsening trade tensions and ongoing global economic slowdown, as well as strength in the US Dollar (USD), left the Euro (EUR) unappealing today.

This made it easier for the Pound to Euro (GBP/EUR) exchange rate to recover from the two month low seen in overnight trade.

Despite a lack of fresh support for the Pound, the Euro has been sold. The US Dollar is the Euro’s rival and the currencies often see a negative correlation, and the Euro has also been pressured by yesterday’s weak Eurozone data.

Pound to Euro Exchange Rate Remains Near Week’s Opening Levels as Eurozone Data Drags on Euro

UPDATE: After seeing volatile movement yesterday and briefly surging earlier today, the Pound to Euro (GBP/EUR) exchange rate is trending closer to the week’s opening levels again at the time of writing.

Demand for the Euro (EUR) weakened following the publication of a disappointing Eurozone consumer confidence projection for April. The figure came in with a disappointing contraction of -7.9.

Despite the disappointing data though, a lack of solid fresh Pound demand meant that GBP/EUR gains were ultimately still limited.

Pound to Euro Exchange Rate Climbs as Parliament Reconvenes

UPDATE: As markets warmed up again following the long bank holiday weekend, the Pound Sterling to Euro (GBP/EUR) exchange rate extended its morning gains.

At the time of writing, GBP/EUR was trending higher than the week’s opening levels at €1.1557 as investors bought the Pound (GBP) back from the lows it saw in quiet Monday trade.

With UK Parliament reconvening and investors still digesting last week’s weak Eurozone data, investors are buying the Pound in hopes that there may be more gains ahead for the pair.

Pound to Euro Exchange Rate Climbs Following Quiet Weekend Trade

Last week, despite some disappointing ecostats worsening concerns about the Eurozone’s economic outlook, the Pound Sterling to Euro (GBP/EUR) exchange rate slipped slightly on Brexit uncertainties.

After opening last week at the level of €1.1565 and tumbling to a fresh three-week-low of €1.1522 on Wednesday, GBP/EUR recovered slightly on Thursday’s data and closed the week at the level of €1.1555.

Since opening this week, GBP/EUR has been weaker. The Euro (EUR) has avoided losses due to hopes that Eurozone growth could rebound in the second half of 2019, while the Pound (GBP) is being held back by Brexit uncertainties.

Amid relatively limited movement this week so far, GBP/EUR investors are awaiting key upcoming Eurozone data, as well as Parliament returning from Easter recess.

Pound (GBP) Exchange Rates Rebound after Easter Holiday

UK markets reopened today, after being closed on Friday and Monday to observe the Easter bank holidays.

At the time of writing this morning, Sterling (GBP) is bouncing back from the lows seen yesterday, though there is no major news or fresh support causing this recovery.

Last week, the Pound found some support in strong domestic retail sales stats, indicating that consumer activity and confidence was resilient despite broad Brexit uncertainties.

For now, investors are firming in the British currency in hopes that there could be some Brexit developments within the coming weeks.

Euro (EUR) Exchange Rate Strength Limited as Eurozone Data Points towards Slowdown

Hopes that the Eurozone’s economic activity was seeing signs of a rebound and that the economy would recover later in the year have been driving Euro (EUR) demand for much of April so far.

However, last week’s data indicated that there may not be a recovery just yet.

While Eurozone inflation stats met forecasts and confidence figures showed signs of improvement, Markit’s April PMI projections came in below expectations in many major prints.

French and German PMIs showed manufacturing contracting at deeper levels than expected, and in the overall Eurozone print even the services and composite prints fell short.

The Euro has been able to avoid further losses this week so far, as European Central Bank (ECB) Executive Board Member Benoit Coeure has said he expected Eurozone growth to rebound in the second half of 2019.

Coeure also said he thought there were ‘no grounds for overly gloomy thoughts’, making it a little easier for investors to remain optimistic on the Euro.

Pound to Euro (GBP/EUR) Investors Focus on Eurozone Data

Amid a lack of UK data due for publication this week, as well as a dearth of solid news on how Brexit will proceed, Pound to Euro (GBP/EUR) traders are currently focusing on this week’s upcoming Eurozone stats.

Following this afternoon’s typically influential Eurozone consumer confidence projection for April, tomorrow will see the publication of Germany’s April business confidence stats from Ifo.

Friday will then round off the week with France’s latest consumer confidence and jobless datasets.

While Euro (EUR) investors focus on Eurozone confidence, the Pound (GBP) is more likely to be influenced by potential UK political developments.

Any surprising developments regarding how Brexit may unfold, or any updates on cross-party Brexit negotiations, are likely to influence the Pound.

On top of this, some UK business optimism and factory data from the CBI on Thursday could also cause some Pound to Euro (GBP/EUR) exchange rate movement in the coming sessions.

Josh Jeffery

Contact Josh Jeffery


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