Pound euro exchange rate flat despite downbeat German data
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning as markets await the publication of the Eurozone’s latest retail sales data.
At the time of writing, GBP/EUR is trading at around €1.1932, virtually unchanged from this morning’s opening levels.
Euro (EUR) subdued ahead of Eurozone data
The euro (EUR) is trading sideways against the majority of its peers this morning as investors await the publication of the Eurozone’s latest retail sales index, scheduled for release later this morning.
The latest survey is forecast to report a slight uptick in August’s reading, with the data forecast to edge up from 0.1% to 0.2%.
Although the data is forecast to report a marginally increase in August’s figure, the index is only set to rise by 0.1% and could undermine the euro instead on the back of such a lacklustre reading.
Further weighing on the single currency this morning is the publication of Germany’s latest factory orders, which slumped well below forecast.
The data, also published for August, confirmed a massive 5.8% contraction in factory orders, significantly down from a previous reading of 3.9%, and coming in well below a more modest -2 expectation.
Commerzbank’s Senior Economist Ralph Solveen commented:
‘Today’s data confirms that demand for German industrial goods has continued to weaken. This suggests that the German economy will at best stagnate in the second half of the year.’
Should the upcoming retail sales data also point to an overall weak reading, the common currency could falter against its peers on the back of rising European Central Bank (ECB) interest rate cut bets.
Pound (GBP) holds steady despite lack of data
The pound (GBP) is managing to hold steady against the majority of its peers this morning despite the absence of any macroeconomic data from the UK.
However, potentially offering GBP exchange rates some modest support this morning are today’s risk-off flows.
As an increasingly risk-sensitive currency, this morning’s cautiously upbeat trading session has seen Sterling remain afloat against the majority of its counterparts.
Pound euro exchange rate forecast: mid-tier UK data in the spotlight?
Looking ahead, the primary catalyst of movement for the pound euro exchange rate looking ahead to tomorrow will likely be some mid-tier economic data from the UK.
The British Retail Consortium’s (BRC) latest retail sales monitor is expected to show a small uptick in last month’s figure, which could offer Sterling some modest support should the data release print as expected.
Turning to the euro, domestic data will be scarce from tomorrow’s data calendar, which could leave EUR exchange rates vulnerable to some upcoming ECB speeches scheduled for release tomorrow.
With ECB rate cut bets rising, will any dovish commentary from central bank officials drive these bets higher and in turn dent the common currency?