Pound Euro (GBP/EUR) Exchange Rate Wavers amid Choppy Trade
The Pound Euro (GBP/EUR) exchange rate is fluctuating today amid choppy trade, a lack of UK data, and mixed signals around the Euro (EUR).
At the time of writing, GBP/EUR is trading at €1.1618, virtually the same as today’s opening level, having moved between highs of €1.1638 and lows of €1.1583.
Euro (EUR) Subdued despite German Factory Order Growth
The Euro initially found some success today, boosted by unexpectedly strong German data.
Factory orders in Germany grew by 0.8% in October, smashing forecasts of a meagre 0.1% growth. As Germany is Europe’s largest economy, and the industrial powerhouse of the Eurozone, the positive report lifted hopes for the bloc’s economic outlook.
In addition, the Euro enjoyed support thanks to its negative correlation with the US Dollar (USD), with the American currency facing fresh selling pressure.
The common currency seems to be finding its upside stifled, however, as worries about the Russia-Ukraine crisis continue to hurt EUR exchange rates. With winter now here, the fighting shows no signs of letting up.
Ukraine has recently launched drone attacks deep into Russian territory, raising fears of an escalation in the conflict. Furthermore, the Kremlin has said that there are ‘no prospects for peace talks at the moment’.
Pound (GBP) Rudderless amid Lack of Data
Meanwhile, the Pound (GBP) is also struggling to find support today amid a lack of UK economic data.
A mixed market mood is causing some volatility in the risk-sensitive Pound. Equity markets are mostly down today, indicating a lack of risk appetite. But the safe-haven US Dollar is struggling while riskier currencies are gaining ground, suggesting an upbeat market mood. Amid this mixed tone among investors, Sterling is wobbling but resisting steeper losses.
With UK data in short supply today, GBP investors may also be taking their cues from domestic British headlines. As the country slips into recession and the cost-of-living crisis deepens, strike action is intensifying across a multitude of sectors. The downbeat outlook is keeping pressure on GBP today.
However, evidence that food inflation may be easing has offered a small ray of hope, which could be adding to the mixed movement.
Pound Euro Exchange Rate Forecast: Sterling to Remain Mixed?
Looking ahead to tomorrow, the absence of notable UK economic data continues.
As a result, GBP investors may turn to the latest house price index from Halifax. Though this report usually has little impact on the Pound, any indication that the UK housing market is continuing to slow may add to broader economic fears, thereby hurting Sterling. Otherwise, GBP traders will likely focus on domestic headlines.
As for the Euro, the day kicks off with Germany’s latest industrial production results. Markets expect a 0.6% slump, but after factory orders exceeded forecasts today, could the latest German data surprise to the upside?
Later tomorrow morning, the third estimate for Eurozone GDP growth is due out. This will likely only drive movement it is revised higher or lower. An above-expected reading could boost EUR while a weaker result may dent the common currency.