Pound euro (GBP/EUR) exchange rate rangebound amid Eurozone data release
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning following the release of Germany’s latest consumer confidence index.
At the time of writing, GBP/EUR is trading at around €1.1662, showing little movement from the morning’s opening levels.
Euro (EUR) subdued following GFK consumer confidence
The euro (EUR) is trading sideways against the majority of its peers this morning following the releases of the latest GFK consumer confident index from Germany.
The reading confirmed that consumer confidence in the Eurozone’s largest economy edged slightly higher in April, rising from a downwardly revised -28.8 to -27.4.
This was the strongest reading since the beginning of the year, however the index remined deep in negative territory.
NIM consumer expert, Rolf Burkl, commented:
‘The recovery in the consumer climate is slow and very sluggish. Real income growth and a stable job market themselves provide good conditions for rapid improvement in consumer sentiment, but there’s still a lack of planning security and optimism about the future among consumers.’
Although an improvement, the continued pessimism in the Eurozone’s largest economy acted as a headwind for the euro this morning.
Pound (GBP) flat amid lack of data
The pound (GBP) is treading water this morning as a lack of macroeconomic data releases leaves Sterling struggling to find a clear direction.
Amid an absence of impactful data, GBP investors may turn to the latest food inflation data released earlier this morning.
The latest index revealed that grocery price inflation slowed to 4.5% in March, marking the lowest level since February 2022. The index also revealed that one in four households are still struggling financially as supermarkets like Waitrose gain more customers.
Fraser McKevitt, the head of retail and consumer insight at Kantar, said:
‘Grocery inflation has come down significantly since hitting an eye-watering peak of 17% in March 2023. However, despite this continued slowdown, many British households are still feeling the squeeze. Twenty-three per cent identified themselves as struggling financially in our data – the same proportion as reported in November last year.’
The increasingly risk-sensitive pound is also being kept afloat this morning amid an improving market mood.
Pound Euro exchange rate forecast: UK GDP to dent the pound?
Looking ahead, the primary driver of movement for the Pound Euro exchange rate this week is likely to be the UK’s final GDP reading for the fourth quarter of 2024.
Scheduled for release on Thursday, the finalised figures are expected to confirm that the UK economy contracted in the fourth quarter as well at the third, by 0.1% and 0.3% respectively, and would confirm the UK fell into a recession in the second half of last year.
This may undermine GBP exchange rates towards the latter stages of the week.
Turning to the Euro, the Eurozone’s latest economic sentiment reading is expected on Wednesday. March’s figure is forecast to show that economic sentiment the Eurozone continues to rise.
Should the data print as expected, this could buoy the euro in mid-week trade.