Pound euro exchange rate flat in the wake of ECB rate decision
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning following yesterday’s European Central Bank (ECB) interest rate decision.
At the time of writing, GBP/EUR is trading at around €1.1847, virtually unchanged from this morning’s opening levels.
Euro (EUR) subdued following ECB interest rate cut
The euro (EUR) is trading mostly flat against the majority of its peers this morning following yesterday’s ECB interest rate decision.
The central bank enacted a widely expected interest rate cut, delivering its second rate reduction of the year.
Despite this, the single currency managed to hold steady following the release and into today’s European session, following a speech from ECB President Chritine Lagarde.
Although the central bank downgraded its growth forecasts for the coming months, Lagarde also spoke on the need to remain ‘data driven’ when deciding upon the future of monetary policy within the Eurozone.
Christine Lagarde commented: ‘We will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim. We are not pre-committing to a particular rate path.
Pound (GBP) quiet amid continued data lull
The pound (GBP) is treading water against the majority of its peers this morning amid a continued lull in UK data releases.
However, the pound has managed to recoup some of its losses from yesterday, following fresh concerns over the UK’s public debt.
The Office for Budget Responsibility (OBR) revealed that debt in the UK could rise to 270% of GDP by the second half of the century, deterring GBP investors.
Preventing the pound from rising today is an unclear market mood, as the increasingly risk-sensitive currency benefits from upbeat trade.
Pound euro exchange rate forecast: Eurozone data to drive movement?
Looking ahead, the primary catalyst of movement for the pound euro exchange rate looking ahead to next week will likely be the publication of Germany’s latest ZEW economic sentiment index.
Scheduled for release on Tuesday, September’s sentiment index is forecast to remain near seven-month lows and is expected to dip further.
Should the data print as expected, this could hobble the single currency as a result.
Turning to the pound, UK data will remain scarce for the first half of the week, which could see GBP exchange rates continue trading without a clear trajectory.
However, on Wednesday, the UK will publish its latest consumer price index (CPI) which could infuse volatility into Sterling during mid-week trade should the latest inflation data ramp up Bank of England (BoE) interest rate cut bets.