Pound Euro (GBP/EUR) exchange rate wobbles amid uncertain trading conditions
The Pound Euro (GBP/EUR) exchange rate is fluctuating in a narrow range so far today as a darkening market mood and downbeat Eurozone data infuse the pair with volatility.
At the time of writing, GBP/EUR is trading at around €1.1693, having wavered between €1.1684 and €1.1698 since the European session started.
Pound (GBP) subdued amid risk-off trade
The Pound (GBP) is struggling to find a clear direction today as a lack of UK economic data leaves the currency rudderless.
In the absence of any new data, GBP investors are looking elsewhere for impetus.
Comments yesterday from Bank of England (BoE) Deputy Governor Dave Ramsden seem to be lending Sterling modest support. Ramsden said that inflation remains too high and that he wants to see more evidence that price pressures are easing before he would consider voting for an interest rate cut.
In particular, Ramsden noted ‘[s]ervices inflation remains at levels well above what is consistent with the 2% inflation target,’ adding that this measure was ‘a key indicator’ for him.
However, the increasingly risk-sensitive Pound is also facing headwinds today amid a broadly downbeat market mood. With investors seeming anxious, they’re opting for safer currencies.
In response, Sterling is wobbling without a clear direct and weakening against its stronger peers.
Euro (EUR) stifled by weak data
Meanwhile, the safer Euro (EUR) is failing to press its advantage against the Pound, despite the bearish market mood, following disappointing Eurozone data.
The bloc’s latest economic sentiment index unexpectedly declined. February’s figure fell from 96.1 to 95.4, rather than rising to 96.7 as forecast.
This weaker-than-anticipated data seems to have stifled EUR’s upside potential against GBP.
Pound Euro exchange rate forecast: BoE’s Mann to boost Sterling?
Looking ahead, the Pound could enjoy a leg-up later this afternoon as BoE policymaker Catherine Mann takes the stage to deliver a speech.
Mann is one of the most hawkish voices at the BoE, having voted for an interest rate hike at the bank’s meeting at the start of the month. As such, she may strike an aggressive tone, pushing back on rate cut bets.
If Mann does sounds hawkish, Sterling could climb. However, an uncharacteristically cautious speech from the external rate-setter could lead the Pound to falter.
Eurozone data is now thin on the ground until tomorrow, when a slew of German releases could drive movement in EUR.
Moderately positive German retail sales and employment data could lend the Euro support tomorrow morning. However, a forecast decline in German inflation – due to be published in the afternoon – could see the single currency slide in the second half of the session, if it boosts bets on an April rate cut from the European Central Bank (ECB).