Pound euro (GBP/EUR) exchange rate flat following German trade data
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning following the release of Germany’s latest trade data and industrial production figures.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1661, virtually unchanged from this morning’s opening rate.
Euro (EUR) fluctuates following German data
The euro (EUR) is volatile this morning, and is down by as much as 0.5% against its riskier counterparts, however is managing to stay afloat elsewhere.
This comes following the release of Germany’s latest trade data, which showed a mixed reading when it came to February’s figures.
The overall trade surplus in the Eurozone’s largest economy fell short of expectations, and printed at €21.4bn, narrowing from €27.5bn and falling short of forecasts for a surplus of €25.5bn.
Furthermore, Germany’s exports fell by a surprising 2% in February, well behind January’s 6.3% increase, and came in lower than a more modest prediction of a 0.5% contraction.
The data sapped EUR sentiment as a narrowing trade surplus increases the risk that Germany may have slipped into a recession at the start of 2024.
However, the downside in the euro remains limited in light of Germany’s accompanying industrial production data. February’s figures pointed to a second consecutive month of growth, coming in at 2.1%, skyrocketing past expectations of a 0.3% increase.
Pound (GBP) quiet amid lull in UK data
The pound (GBP) is trading sideways against the majority of its peers as a lack of domestic data leaves Sterling struggling to find a direction this morning.
An upcoming speech from Bank of England (BoE) Deputy Governor Sarah Breeden could trigger some movement later this afternoon however.
Should Breeden echo recent remarks from her colleague, Governor Andrew Bailey, and confirm that interest rate cuts are firmly on the table at future BoE meetings, GBP exchange rates could tumble.
Pound euro exchange rate forecast: euro to fluctuate following ECB rate decision?
Looking ahead, the primary catalyst of movement for the pound euro exchange rate this week will undoubtedly be the European Central Bank’s (ECB) upcoming interest rate decision, scheduled for Thursday.
The ECB is widely expected to keep interest rates on hold at 4.5% this month, but should policymakers hint that the central bank could start cutting rates in June, EUR exchange rates could face fresh selling pressure.
However, should officials point to a more hawkish outlook, and push back against upcoming interest rate cuts, the single currency could firm against its peers.
Turning to the pound, the theme of minimal data will continue into much of the week, potentially limiting GBP movement until the release of the UK’s GDP figure at the end of the week.
Economists forecast growth will have slowed to a crawl in February. Could this leave Sterling to close the week on a sour note?