Pound euro exchange rate dented amid cautious trade
The pound euro (GBP/EUR) exchange rate is retreating this morning as a return to anxious trading conditions is hobbling the currency pairing.
At the time of writing, GBP/EUR is trading at around €1.1963, down roughly 0.3% from this morning’s opening levels.
Downbeat trade stymies pound (GBP)
The pound (GBP) is losing ground against the majority of its peers this morning as an absence of market moving data sees the British currency left vulnerable to shifts in market appetite.
Earlier this week, Sterling sentiment was buoyed by a decisively risk-on mood as the People’s Bank of China (PBoC) announced its biggest set of stimulus measures aimed to boost the Chinese economy since the Covid-19 pandemic.
However, moving into mid-week trade, optimism over the stimulus measures are starting to fade amid growing speculation that said growth measures were overdone.
This has seen markets shun riskier assets such as the Pound today in favour of safe-haven currencies.
Euro (EUR) lifted by anxious market mood
The euro (EUR) is ticking up against the majority of its peers this morning as today’s souring market mood as offered the safe-haven currency some modest support against its riskier rivals.
As optimism over China’s boosting measures dwindle, so do the risk-on flows that have been weighing on the common currency this week.
However, the euro’s upside is fairly limited, as an absence of economic data from within the bloc leaves the single currency vulnerable to the current pessimistic economic outlook in the Eurozone.
Pound euro exchange rate forecast: Eurozone data to drive movement?
Looking ahead, the primary catalyst of movement for the pound euro exchange rate looking at tomorrow will likely be some high impact data from within the Eurozone.
Germany is set to publish its latest GFK consumer confidence index for the month ahead, which could infuse significant volatility into the euro.
The data is forecast to report a marginal uptick in October, with the index set to rise from -22.0 to -21.5. Should the data print as expected, the single currency could tick up in the wake of the release.
However, should the index fall below expectations and confirm further deterioration in consumer confidence in the bloc’s largest economy, the common currency will likely falter against its peers amid continued concerns over the Eurozone’s economic outlook.
Turning to the pound, UK data will be absent for the remainder of the week, which will likely see GBP exchange rates trade in line with market appetite for risk.
Should this morning’s gloomy mood prevail, the pound will likely remain on the back foot on the back of its status as an increasingly risk sensitive currency.