GBP/EUR Exchange Rate Steady as UK House Prices Rise in July
The Pound to Euro (GBP/EUR) exchange rate held steady this morning, with the pairing currently trading around €1.105.
Sterling held steady following comments from Rishi Sunak, the Chancellor of the Exchequer, this morning, who said that ‘we remain confident that it’s possible to get a [Brexit] deal in September’. As a result, GBP investors have become more hopeful that UK-EU trade talks could be progressing.
However, Rishi Sunak was also dovish about extending the furlough scheme, saying that it would give people a false sense of hope, keeping people trapped in a situation in which they can expect a job to return to.
In UK economic news, today saw July’s Halifax house prices figure rise from 0% to 1.6%. Consequently, Pound (GBP) traders have become more hopeful for the Britian’s housing market.
Russell Galley, Managing Director, Halifax, commented on the data:
‘The latest data adds to the emerging view that the market is experiencing a surprising spike post lockdown. As pent-up demand from the period of lockdown is released into a largely open housing market, a low supply of available homes is helping to exert upwards pressure on house prices.’
However, GBP investors are remaining cautious on fears of a possible second-wave effecting the British economy.
Euro (EUR) Steady as Germany’s Industrial Production Rebounds in June
The Euro (EUR) failed to gain on the Pound (GBP) today despite a stronger-than-expected rebound in Germany’s industrial production in June. The figure rose from 7.4% to 8.9%, buoying confidence in the Eurozone’s largest economy’s industrial sector.
Holger Schmieding, chief economist at Berenberg, commented on the data, saying:
‘Having been led initially by domestic consumer spending on goods, the recovery is gradually broadening out to early stages of production and from domestic to foreign demand
‘In the absence of a major accident, Germany can recoup at least half the second-quarter drop in GDP in the third quarter already.’
Today also saw the publication of Germany’s exports figure or June, which beat consensus and rose by 14.9%. However, with concerns growing in Europe over a possible second-wave, the Euro (EUR) failed to make any significant headway on Sterling.
GBP/EUR Forecast: Could Rising UK Unemployment Drag Down the Pound Next Week?
Pound (GBP) traders are looking ahead to Monday’s release of the BRC like-for-like retail sales for July. However, with retail sales remaining relatively strong, we could see Sterling benefited.
Euro (EUR) investors will be looking ahead to Tuesday’s publication of the Eurozone’s ZEW Survey of economic sentiment in August. If this rises, then we could see the single currency head higher on growing hopes for the Eurozone’s economic recovery.
The GBP/EUR exchange rate will remain sensitive to UK unemployment levels of the nation’s coronavirus situation next week. If either of these deteriorate, we could see the pairing begin to fall.