GBP/EUR Exchange Rate: Pound Wavers amid Light Data Calendar
The Pound Euro (GBP/EUR) exchange rate fluctuated over the past week, amid a dearth of macroeconomic releases.
With limited catalysts for movement, GBP investors initially remained focused on the UK’s economic outlook. Concerns the UK could face a recession in the second half of 2023 sapped Sterling sentiment.
However, a shift towards bullish trade at the end of last week brought some gains to the increasingly risk-sensitive currency. While the UK’s first quarter GDP was revised upwards, recession fears dulled its impact.
Through the rest of the week, data releases remain in short supply for the Pound. Because of this, GBP may be left exposed to shifts in risk appetite. If the market mood remains downbeat, Sterling could struggle to attract support.
GBP/USD Exchange Rate: Pound Struggles as Market Mood Sours
The Pound US Dollar (GBP/USD) exchange rate slipped over the past seven days, touching a six-month low.
The Pound initially saw mixed movement at the beginning of this week. While the final manufacturing index printed inline with preliminary readings, continued economic concerns restricted GBP.
The continued absence of any releases left Sterling vulnerable to Tuesday’s souring market mood. This sent the currency downward against its safer peers.
The data drought looks set to continue next week. Sterling will likely be unable to gain much of an advantage against its peers, if investors remain cognizant of the UK’s bleak economic outlook.
USD/GBP Exchange Rate: US Dollar Rallies amid Risk Averse Trade, Upbeat Data
The US Dollar Pound (USD/GBP) exchange rate strengthened over the past week, with bearish trade and upbeat US economic data underpinning demand for the ‘Greenback’.
Following a cooldown in the Federal Reserve’s preferred indicator for inflation, the core PCE price index, the US Dollar (USD) slipped against its peers. However, the market mood darkened towards the end of Friday’s session, which allowed USD to recover.
An above-forecast reading for September’s ISM manufacturing index extended additional support at the start of this week. While it remained in contraction territory, it indicated that the sector was moving closer to a recovery.
This was further compounded by forecast-beating JOLTs job openings figures, which indicated robust demand for employment. The upbeat data worked in tandem with rocketing US Treasury Yields to push USD higher.
On Friday, September’s non farm payrolls data is due to print. Economists expect the number of jobs created to have fallen on a monthly basis, but for the unemployment rate to hold at 3.7%. The mixed data could inject volatility to USD rates.
EUR/USD Exchange Rate: Euro Slides as USD Strength Erases Gains
The Euro US Dollar (EUR/USD) exchange rate plunged over last week, as the Euro struggled against the US Dollar’s continued strength.
On Thursday, the common currency was initially rudderless. A mixed reading from the latest economic sentiment index sapped support for EUR.
This was improved on Thursday, as the risk-on impulse weakened USD and allowed the Euro to shrug off cooling inflation.
However, the pairing’s negative correlation saw the common currency unable to capitalise on upbeat data releases. August’s unemployment data likely stemmed some losses, as it printed at 6.4%, matching previous record lows.
Surprisingly hawkish remarks from European Central Bank (ECB) Chief Economist Philip Lane did little to aid EUR on Tuesday.
Looking ahead, a series of impactful German data is scheduled to print over the week. Firstly, August’s trade data could weigh on the Euro if the trade surplus narrows as forecast. However, an increase in German factory orders could bring some cheer to EUR investors.