Pound Euro (GBP/EUR) Exchange Rate Rebounds on EUR Weakness

Pound Euro (GBP/EUR) Exchange Rate Recovers as EUR Falls

(Updated 16:50, 2/8/22) The Pound Euro (GBP/EUR) exchange rate reversed its fortunes today as EUR selling pressure pushed the currency pair higher.

The Euro (EUR) suffered from its negative correlation to the safe-haven US Dollar (USD) as a downbeat market mood saw USD gain ground.

In addition, concerns about the Eurozone economy and energy security continued to act as headwinds for EUR exchange rates.

Original article continues below:

Pound Euro (GBP/EUR) Exchange Rate Wobbles and Weakens

The Pound Euro (GBP/EUR) exchange rate wavered this morning, ticking lower overall, amid a lack of notable economic data on both sides.

At the time of writing, GBP/EUR is trading at €1.191, down from this morning’s high of €1.194.

Pound (GBP) Softens in Absence of Data

The Pound (GBP) was muted this morning as GBP traders took a breather ahead of the Bank of England (BoE) interest rate decision later in the week.

Economists expect the BoE to raise rates by 0.5%, although a 0.25% rise is possible. Ahead of the decision, GBP investors seem to be exercising some caution.

In addition, a lack of any market-moving UK economic data is adding to the subdued mood around Pound Sterling.

Euro (EUR) Muted amid Thin Trading Conditions

Meanwhile, the Euro (EUR) is managing to crawl higher against the Pound today, although trading conditions are thin.

An absence of Eurozone economic data is leaving the single currency without much drive.

Additionally, a fairly downbeat mood in European markets is keeping EUR exchange rates under pressure, as is a modest recovery in the US Dollar (USD), with which the Euro is negatively correlated.

Despite these mild headwinds, EUR is wavering up against GBP.

Pound Euro Exchange Rate Forecast: Movement to Remain Limited?

Trading conditions could remain thin today, thereby limiting movement in the Pound Euro pair. As a result, we may see the GBP/EUR exchange rate remain in a narrow range.

Domestic UK news could influence Pound Sterling through today’s session. Any headlines about the UK’s cost-of-living crisis or the Conservative Party leadership contest may impact GBP.

As for the single currency, movements in USD could affect EUR. The US JOLTs job openings figures this afternoon are forecast to show continued strength in the American labour market. If this boosts the ‘Greenback’ then the Euro could slip.

Samuel Birnie

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