Pound euro (GBP/EUR) exchange rate muted amid lull in data
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning as the start of the week sees both UK and Eurozone economic data thin on the ground.
At the time of writing, GBP/EUR is trading at around €1.1621, showing little movement from this morning’s opening levels.
Pound (GBP) supported by economic optimism
The pound (GBP) is holding steady against the majority of its peers this morning despite a lack of any UK economic data.
However, Sterling sentiment in being moderately underpinned this morning by suggestions that the UK economy is ‘turning a corner’, as UK business output rose to a two-year high in April.
A report from accounting and business advisory company BDO suggests that increased consumer spending power is helping to drive a service-led rebound.
Kaley Crossthwaite, partner at BDO, commented:
‘It’s heartening to see a turning point begin to materialise for the economy, with the services sector driving the bounce back so far from last year’s technical recession.’
This has served to support GBP exchange rates in the first half of today’s European session.
Euro (EUR) quiet amid data deficiency
The euro (EUR) is trading sideways against the majority of its peers this morning as shortage of economic data from within the Eurozone today has seen the common currency struggle to find a clear direction.
Elsewhere, a mixed market mood is serving to further undermine the safe-haven currency.
As the market mood remains unclear this morning, the euro is struggling to garner investor attention.
Pound euro exchange rate forecast: Rise in unemployment to drag on Sterling?
Looking ahead, the primary catalyst of movement for the pound euro exchange rate tomorrow will likely be the publication of the UK’s latest jobs report.
Tuesday’s data is expected to report that unemployment in the UK ticked up from 4.2% to 4.3% in March.
The accompanying wage growth figures are also forecast to show that average earnings (excluding bonuses) cooled over the same time period.
Further signs that the UK labour market is slowing could ramp up Bank of England (BoE) interest rate cut bets, and in turn undermine the pound tomorrow.
Also scheduled for release on Tuesday is Germany’s latest ZEW economic sentiment index.
The index is expected to report that morale in the Eurozone’s largest economy continued to improve in May, and could help to bolster the euro.
EUR exchange rates may also be influenced by Germany’s latest consumer price index. April’s finalized CPI figures are expected to confirm German inflation held steady at 2.2%, just shy of the European Central Bank’s (ECB) 2% target. Could this act as a headwind for the single currency?