Pound euro exchange rate remains at two-week high amid lack of data

Pound euro (GBP/EUR) quiet despite dovish BoE

(Updated 16:15, 20/05/24) The pound euro (GBP/EUR) exchange rate has remained trading in a narrow range moving into this afternoon’s European session, however, has maintained its position at a two-week high.

Despite some dovish commentary earlier this morning from Bank of England (BoE) Deputy Governor Ben Broadbent, the pound (GBP) is managing to stay afloat against its peers this afternoon.

Broadbent said:

‘Whatever the priors of its individual members the MPC will continue to learn from the incoming data and, if things continue to evolve with its forecasts – forecasts that suggest policy will have to become less restrictive at some point – then it’s possible Bank Rate could be cut some time over the summer.’

Despite further implications from BoE officials that the central bank will likely begin cutting interest rates sooner rather than later, Sterling has remained above ground against its peers.

The euro (EUR) has continued to trade without a clear direction this afternoon amid a lack of further economic data.

Also weighing on EUR exchange rates is today’s market mood. As a cautiously upbeat mood has prevailed throughout the course of the day, the safe-haven currency has struggled to catch bids.

At the time of writing, GBP/EUR is trading at around €1.1695, virtually unchanged from today’s opening levels.

Original article continues below:

Pound euro (GBP/EUR) exchange rate quiet amid absence of economic 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 €1.1677, virtually unchanged from this morning’s opening levels.

Pound (GBP) flat amid lull in data

The pound (GBP) is trading sideways against the majority of its peers this morning as a lack of UK economic data has seen Sterling demand limited thus far.

Amid the lull in domestic data, GBP investor attention likely remains fixed on current Bank of England (BoE) interest rate cut bets.

Markets are currently place the odds that the central bank will enact its first rate cut in June this year at over 50%.

The pound is vulnerable to give ground this week if dovish comments from BoE policymakers or underwhelming solidify June rate cut bets.

Euro (EUR) muted amid mixed market mood

The euro (EUR) is treading water against the majority of its peers this morning as a shortage of Eurozone data sees the common currency struggle to find a clear direction.

Elsewhere, a cautiously optimistic market mood is further undermining demand for the safe-haven single currency this morning.

As markets have recently cut back on bets that the Federal Reserve will keep interest rates higher for longer following the latest domestic inflation figures, the market mood has turned mildly positive, sapping EUR’s demand this morning.

Pound euro exchange rate forecast: UK inflation to dent the pound?

Looking ahead, the primary catalyst of movement for the pound euro exchange rate this week will likely be the UK’s upcoming consumer price index.

Scheduled for release on Wednesday, the CPI figures are expected to report both headline and core inflation cooled last month.

The deceleration in the headline figures is expected to be particularly sharp, falling just shy of the BoE’s 2% target.

Should the data print as expected, this could undermine GBP exchange rates in mid-week trade should the latest CPI data serve to cement current rate cut bets for June.

Turning to the euro, the most notable data release this week will come in the form of the Eurozone’s latest PMI data, expected on Thursday.

As both figures are forecast to rise in May, with services expected to rise from 53.2 to 53.5 whilst manufacturing is expected to rise from 45.7 to 46.6, the data could serve to lift EUR exchange rates towards the end of the week.

Several upcoming European Central Bank (ECB) speeches could also infuse volatility into the Euro this week.

As markets are almost certain that the ECB will begin loosening its monetary policy in June, any hawkish commentary from central bank officials could see the euro firm against its peers this week.

Sarah Ebrahem

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