Pound euro exchange rate flat following German industrial production
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning following the publication of Germany’s latest industrial production data.
At the time of writing, GBP/EUR is trading at around €1.1844, virtually unchanged from this morning’s opening levels.
Euro (EUR) undermined by German data
The euro (EUR) is struggling to garner investor attention this morning following the publication of Germany’s latest industrial production data.
The latest index missed forecasts in July, falling from 1.7% to -2.4%, well behind a more modest -0.3% expectation.
Another lacklustre data reading from within the Eurozone’s largest economy has seen the single currency struggle to catch bids as it has reinforced overall German economic pessimism.
Carsten Brzeski, Global Head of Macro at ING, commented following the release:
‘A drop in German industrial production in July not only brings a weak start to the third quarter but is another illustration of how difficult it will be to bring the economy back to strong growth.’
However, lending EUR exchange rates some modest support this morning is a return to cautious trade.
As a safe-haven currency, this morning’s risk-off flows have cushioned some of the euro’s losses.
Pound (GBP) quiet amid thin trading conditions
The pound (GBP) is treading water against the majority of its peers this morning as an absence of UK data sees Sterling fail to find a clear trajectory.
Further undermining GBP exchange rates however is this morning’s downbeat market mood.
As an increasingly risk-sensitive currency, today’s safe-haven dash has left GBP exchange rates struggling to garner investor interest.
Pound euro exchange rate forecast: US data to drive movement?
Looking ahead to this afternoon, the pound euro exchange rate could experience significant volatility in the second half of today’s European session following some high-impact data from the US.
The US will release its latest non-farm payrolls report this afternoon which is forecast to confirm another weak reading in August.
Following yesterday’s lower than expected ADP employment report, further signs of a weakening US labour market could see Federal Reserve interest rate cut bets rise, and in turn see USD slump.
However, should the data print as expected, this could buoy the euro on the back of its negative correlation with the US dollar.
Turning to the pound, as UK data will remain absent for the remainder of the day, GBP exchange rates could also be impacted by this afternoon’s US data release.
Should the data spark a risk-on mood, Sterling sentiment could firm in the wake of the release. However, should markets remain downbeat, GBP exchange rates will likely close the week on the back foot.