Pound euro exchange rate muted as markets brace for Eurozone CPI
The pound euro (GBP/EUR) exchange rate is trading mostly flat this morning as markets await the publication of the Eurozone’s latest consumer price index (CPI).
At the time of writing, GBP/EUR is trading at around €1.1896, virtually unchanged from this morning’s opening levels.
Euro (EUR) wavers ahead of inflation print
The euro (EUR) is fluctuating against the majority of its peers this morning as EUR investors likely hold off from placing any aggressive bets ahead of some high impact data scheduled for this afternoon.
Following on from yesterday’s cooler-than-expected German inflation reading, an expected decline in the Eurozone’s own preliminary consumer price index today could infuse notable volatility into EUR exchange rates.
As the latest headline inflation rate is forecast to cool from 2.6% to 2.2%, just shy of the European Central Bank’s (ECB) 2% target, this will likely spur on current ECB rate cut bets, and undermine the single currency in the process.
However, with Eurozone unemployment also scheduled for release this afternoon, will confirmation that unemployment remained near record lows offer the European currency any support?
Further undermining the euro however are this morning’s upbeat trading conditions, which have seen markets favour riskier counterparts leaving the safe-haven EUR on the back foot.
Pound (GBP) quiet amid continued lull in data
The pound (GBP) is trading largely flat against the majority of its peers this morning as a continued absence of domestic data releases sees Sterling fail to find a clear trajectory once again.
However, weighing on the pound this morning as concerns over the overall health of the UK economy, following a speech from UK Prime Minister earlier this week.
As Kier Starmer warned of a ‘painful’ upcoming Autumn Budget, Sterling sentiment has remained dampened as a result.
However, a risk-on mood is offering the increasingly risk-sensitive pound some modest support this morning, as it remains above ground against the majority of its counterparts.
Pound euro exchange rate forecast: PMIs in the spotlight
Looking past the Eurozone’s inflation reading this afternoon, the primary catalyst of movement for the pound euro exchange rate at the start of next week will likely be the publication of both the UK’s and the Eurozone’s finalised manufacturing PMIs for August.
Scheduled for release on Monday, the UK’s finalised manufacturing PMI is forecast to confirm the sector remained in expansion territory (a reading over 50) and could see GBP exchange rates begin the week on the front foot.
Turning to the euro, the Eurozone’s finalised manufacturing index is expected to show that the sector remained in contraction territory (a score below 50) and could hobble the single currency should the data match preliminary estimates.