Pound euro exchange rate flat despite upbeat UK GDP
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning following the publication of the UK’s latest GDP reading.
At the time of writing, GBP/EUR is trading at around €1.1942, virtually unchanged from this morning’s opening levels.
Pound (GBP) unchanged by positive UK GDP
The pound (GBP) is trading sideways against the majority of its peers this morning following the publication of the UK’s latest GDP reading.
The data reported that the UK economy expanded by 0.2% in August, following two months of stagnation in June and July.
The index saw an increase across all major sectors in August, with services, production and construction all rising.
However, despite this optimistic reading, Sterling sentiment has remained largely unchanged in the wake of the release, as the ‘broader picture’ of UK growth levels seem to have stymied the majority of the Pound’s upside.
ONS Director of Economic Statistics Liz McKeown comments:
‘All main sectors of the economy grew in August, but the broader picture is one of slowing growth in recent months, compared to the first half of the year. In August accountancy, retail and many manufacturers had strong months, while construction also recovered from July’s contraction. These were partially offset by falls in wholesaling and oil extraction.’
Euro (EUR) muted on ECB rate cut bets
The euro (EUR) is struggling to garner investor attention this morning as a rise in European Central Bank (ECB) interest rate cut speculation continues to hobble the common currency.
Following several ECB speeches this week that featured some dovish commentary from both Mārtiņš Kazāks and François Villeroy de Galhau, who implied a need for upcoming rate cuts, the Euro has found it difficult to gain ground on the back of a rising ECB rate cut bets.
Yesterday evening saw the publication of the central banks meeting minutes from its latest interest rate decision, which skewed hawkish and hinted at a gradual reduction in monetary policy instead.
However, the minutes failed to undermine current ECB rate cut speculation of two more upcoming cuts this year, which has left the single currency struggling to catch bids today.
Pound euro exchange rate forecast: high impact data to infuse volatility?
Looking ahead, the primary catalyst of movement for the pound euro exchange rate looking ahead to next week will likely be several significant data releases scheduled for publication on Tuesday.
Looking at the Pound, the UK will release its latest labour data which could infuse volatility into GBP exchange rates should the latest unemployment index rise.
Turning to the Euro, Germany is set to release its latest ZEW economic sentiment index which could severely undermine the common currency should the latest index fall further than last months yearly low.