Pound Euro (GBP/EUR) Exchange Rate Falls as UK Rail Strikes Hit Hospitality Sector
(Updated 13:40 30/12/22)
The Pound Euro (GBP/EUR) exchange rate has remained on the defensive this afternoon. A risk-off market mood has continued to weigh on the currency pair.
The economic impact of the UK’s ongoing rail strikes may also be pushing GBP/EUR lower today. Hospitality sector heads outlined how the hit to profits was greater than the £1.4b previously forecast.
At time of writing the GBP/EUR exchange rate was at around €1.1280, which is down roughly 0.2% from this morning’s opening figures.
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Pound Euro (GBP/EUR) Exchange Rate Drops amid Risk-Off Mood
The Pound Euro (GBP/EUR) exchange rate is slipping today. A risk-off market mood could be weighing on the currency pair. A slump in UK house prices and poor forecasts for the UK incomes in 2023 could also be pushing GBP/EUR lower.
At time of writing the GBP/EUR exchange rate was at around €1.1286, which is down roughly 0.2% from this morning’s opening figures.
Pound (GBP) Slips as Reports Indicate PM Sunak Set to Slash Business Energy Support
The Pound (GBP) is edging lower against its rivals today. A retreat in global risk appetite may be weighing on Sterling. Further signs of a downturn in the UK housing market could also be prompting losses in the Pound today.
Figures released today indicated a fourth consecutive month of declines in the UK’s housing sector, the longest since 2008. Property prices fell on average by 0.1% month-on-month in December.
Downbeat forecasts for the UK’s economy in 2023 could also be denting confidence in the Pound. Soaring energy and mortgage costs are expected to cause a 3.8% fall in household incomes.
The Pound may also be coming under pressure from reports of a slash in UK energy bill support for businesses. A report in The Times on Thursday indicated that Prime Minister Rishi Sunak is set to halve financial support for businesses.
Euro (EUR) Rises Against Pound as Forecasts Point to Persistently High German Inflation
The Euro (EUR) is seeing mixed movements today. A risk-off market mood is helping EUR to climb against its riskier peers including the Pound. On the other hand, the Euro is slipping against its safer rivals.
Forecasts of persistently high inflation in Germany, the trading bloc’s largest member, could be lending support to the Euro today. In a survey published by Reuters on today, German business head Siegfried Russwurm signalled that inflation was now driven by a wide variety of factors.
The prospect of higher inflation could be prompting investors to increase their bets on more aggressive action from the European Central Bank (ECB).
The prospect of further escalations in the Russia-Ukraine conflict may be adding the Euro’s woes today, however.
GBP/EUR Exchange Rate Forecast: Will Signs of Cooler Eurozone Inflation Pull Euro Lower?
Looking to the week ahead for the Euro, the final reading of December’s Eurozone manufacturing PMI on Monday could pull the Euro lower if it confirms a contraction
On Tuesday, December’s German unemployment figures could pull EUR lower if it remains unchanged at 5.6%. The rate has slowly been climbing over the course of 2022. Evidence of a stable labour market could see investors pare back ECB rate hike bets.
Also on Tuesday, a drop in Germany’s December inflation figures could see further losses for the Euro if they print as expected. A forecast slip in Eurozone inflation for December on Friday could have a similar effect on the Euro.
On Wednesday, the final reading of December’s Eurozone PMI for the services sector could see the Euro slide further if the data confirms a contraction.
A predicted slip in German retail sales on Friday could add to the single currency’s losses.
For the Pound, the final reading of December’s private sector PMIs on Tuesday and Thursday could push Sterling lower if they print as forecast. The data for the UK’s manufacturing sector is expected to confirm a contraction, whereas output in the services sector is set to stagnate.
The Pound will see no other significant data releases next week. Further strikes could weigh on GBP if they continue across the UK’s public sector.