Pound euro exchange rate flat following German PPI
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning following the publication of Germany’s latest producer price index (PPI).
At the time of writing, GBP/EUR is trading at around €1.1994, virtually unchanged from this morning’s opening levels.
Euro (EUR) holds steady following lacklustre German data
The euro (EUR) is managing to hold steady against the majority of its peers this morning despite the publication of some below forecast data from within the Eurozone’s largest economy.
Germany’s latest producer price index declined further in September, falling from a previous reading of 0.8% down to -1.4%, and confirmed a 15th consecutive month of consumer deflation.
An exert from the release, published by the German Federal Statistical Office, read:
‘The main reason for the year-on-year decline in producer prices in September 2024 was again the decline in energy prices, while capital, consumer and intermediate goods were more expensive.’
However, despite another downbeat economic data release from Germany, the single currency is managing to stay afloat against the majority of its counterparts, supported by a marginally risk-off market mood.
Pound (GBP) quiet amid thin trading conditions
The pound (GBP) is struggling to garner investor attention this morning, and is trending mostly flat against its peers, as a data-light calendar sees Sterling struggling to find a clear trajectory at the start of the week.
Further pressuring GBP exchange rates this morning is a slightly cautious market mood.
As investors favour safer assets, the pound is struggling to catch bids on the back of its nature as an increasingly risk-sensitive currency.
Pound euro exchange rate forecast: ECB speeches in the spotlight?
Looking ahead, the primary catalyst of movement for the pound euro exchange rate looking at tomorrow will likely be several European Central Bank (ECB) speeches, amid a lack of any economic data releases.
EUR investors can expect to see three ECB speeches on Tuesday, including one from the central banks President Christine Lagarde.
Following the ECB’s decision to cut interest rates by 25 basis-points last week, investors will listen out for any further dovish commentary from the central bank.
Should Lagarde or any of her colleagues hint at further reductions in monetary policy this year, the common currency could falter as a result.
Turning to the pound, UK data will once again be absent from Tuesday’s data calendar. This could see GBP exchange rates continue to trade in line with risk dynamics and without a clear direction.
Should markets remain cautious, Sterling will likely remain on the back foot. However, should markets move to upbeat trading conditions, the British currency could rise despite a lack of any further economic drivers.