GBP/EUR Exchange Rate Steady as Eurozone GDP Beats Expectations
The Pound to Euro (GBP/EUR) exchange rate is currently treading in a narrow range this morning as a stronger-than-expected Eurozone GDP print helps to offset broad support for Sterling.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1602, up roughly 0.3% from today’s opening rate.
Euro (EUR) Buoyed by GDP Surprise
The Euro (EUR) is firming this morning, after Eurozone GDP proved surprisingly resilient in the third quarter.
According to preliminary data published by European statistics agency, Eurostat, the Eurozone economy expanded by 0.2% in the third quarter, beating expectations growth would narrow to just 0.1%.
There has been considerable concern over a slowdown in the Eurozone in recent months, so today’s figures come as a welcome surprise to EUR investors.
However, it’s important to point out today’s estimate does not include Germany, which will publish is out figures sometime next month.
This could see growth revised down in the next estimate as the Eurozone’s largest economy is widely feared to have slipped into a recession in the third quarter.
Pound (GBP) Bolstered by Speculation of Tory Election Victory
The Pound (GBP) is trending higher this morning as markets begin to bet on a Conservative victory in the UK’s upcoming election.
In its first poll since the December election was confirmed, YouGov gives a 15 point lead to the Tories over Labour.
— Matt Chorley (@MattChorley) October 31, 2019
Further bolstering speculation of a Tory victory are reports suggesting that the Brexit party will not field candidates in every constituency in order to avoid splitting the vote of leave supporters.
Sources suggest that the Brexit party may stand in as few as 20 seats, potentially eliminating a major hurdle for Boris Johnson’s election campaign.
However many Observers remain sceptical, pointing out the Conservatives enjoyed a similar lead at the start of the 2017 election, which ended with Theresa May losing her majority.
Moreover the upcoming election looks set to be the most polarising in living memory due to the issue of Brexit, something which is known for leading to unpredictable outcomes.
GBP/EUR Exchange Rate Forecast: Weak UK Manufacturing PMI to Drag on Sterling?
With Brexit now delayed and election campaigning not due to kick into full force until next week, could we see GBP exchange rates actually influenced by some humble economic data?
Barring any major political headlines, the release of the UK’s latest manufacturing PMI looks drive the Pound to Euro (GBP/EUR) exchange rate at the end of the week.
This may see Sterling face some pressure tomorrow amidst forecasts the contraction in the factory sector will have deepened in October.
Meanwhile, Eurozone data looks pretty thin on the ground on Friday, potentially leaving the Euro vulnerable to further losses if the US Dollar (USD) is buoyed by a positive payroll report.