GBP/EUR Exchange Rate Rangebound on Stagnating UK Growth
The Pound Euro (GBP/EUR) exchange rate held steady this morning, with the pairing currently trading around €1.183 after the flash UK GDP report for the fourth-quarter confirmed forecasts and stagnated at 0%.
My take on todays GDP figures: https://t.co/lnIrmsWoPj
— Rob Kent-Smith (@Rob_KS_ONS) February 11, 2020
Today also saw the UK’s BRC Like-For-Like Retail Sales report for January stall at 0%, further escalating concerns for the nation’s struggling economy post-Brexit.
Helen Dickinson, the BRC’s Chief Executive, was more mixed in her analysis, however, saying:
‘[Although] January saw a return to growth [for retail sales] … recent political uncertainty and a decade of austerity appear to have ingrained a more thrifty approach to shopping among consumers.’
As the economic outlook for the British economy continues to darken, with the added uncertainty over whether the UK and secure a trade agreement with the EU by the end of this year, market appetite for the Pound is being increasingly compromised.
EUR/GBP Exchange Rate Steady, Eurozone Market Sentiment Remains Low
The Euro (EUR) struggled to make any gains on Sterling today following yesterday’s downbeat Eurozone Sentix investor confidence gauge for February, which showed a decrease from the previous month’s 7.6 to 5.2.
Manfred Huebner, the Managing Director at Sentix, highlighted China’s coronavirus outbreak as a contributing factor the downcast confidence, saying:
‘The drastic measures taken by the Chinese government for the Hubei region show the danger to the global economy if the outbreak cannot be limited regionally.’
This afternoon will see Christine Lagarde, the newly-appointed President of the European Central Bank, deliver a speech. Any dovish comments about the bloc’s economic outlook, however, would drag on the single currency.
Meanwhile, growing concerns over China’s coronavirus outbreak is providing some uplift for the safe-haven European currency, with fears that China, which is the second-largest economy, could face an economic setback in the near-term.
GBP/EUR Outlook: Could Sterling Sink on a Downbeat Autumn HM Treasury Statement?
Euro (EUR) investors will be looking ahead to tomorrow’s release of December’s Eurozone industrial production report, which is forecast to deteriorate from the previous month’s 0.2% to -1.6%.
With further signs that the Eurozone’s economy is facing a downturn this year, we could likely see the EUR/GBP exchange rate begin to struggle.
Pound (GBP) traders, meanwhile, will be keeping a close eye on tomorrow’s Autumn Forecast Statement from the HM Treasury, which could provide some insight into the British economy going forward. Any dovish commentary about the economy post-Brexit, however, would prove Pound-negative.