The Pound Euro (GBP/EUR) exchange rate ticked higher last week, with a good portion of the pairing’s strength coming from some upwardly revised UK data.
What’s Been Happening: Pound Euro Firms amid Positive Revision to UK Private Sector Growth
The Pound (GBP) opened last week on solid footing as it was supported by an upwardly revised UK manufacturing PMI. While the Euro (EUR) ran afoul of its negative correlation with the US Dollar (USD).
The Euro faced some additional headwinds in mid-week trade in response to some disappointing Eurozone retail sales figures.
At the same time, Sterling then caught fresh bids on Wednesday in response to the UK’s latest services PMI. September’s finalised figures saw the index revised up from 47.2 to 49.3. While the sector remained in contraction, it was a far less grim outlook for the UK economy.
However, the Pound failed to sustain these gains into the second half of the session. While at the same time, the Euro benefitted from a weakening of the US Dollar.
Closing out the week was the publication of Germany’s latest factory orders data. August’s data helped the Euro to end the session on a positive note after reporting a stronger-than-expected recovery in order growth.
Three Things to Watch Out for This Week
- UK GDP
The only UK data of note this week will be the UK’s latest GDP figures. Economists forecast growth will have rebounded in August. Will this help the Pound to maintain its positive trajectory?
- ECB Minutes
The minutes from the European Central Bank’s (ECB) September policy meeting will be published last this week. If they reinforce expectations the bank’s hiking cycle is over, the Euro is likely to fall.
- German Inflation
In the meantime, Germany will release its latest consumer price index on Tuesday. Will September’s finalised figures weigh on EUR if they confirm a sharp deceleration in inflation?
Pound Euro Forecast
Elsewhere the GBP/EUR exchange rate may be influenced by geopolitical tensions. As the escalating conflict between Hamas and Israeli defence forces looks to upset market risk dynamics this week.