Pound euro exchange rate muted amid data-light morning
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning amid an absence of both UK and Eurozone economic data releases this morning.
At the time of writing, GBP/EUR is trading at around €1.1995, virtually unchanged from this morning’s opening levels.
Pound (GBP) subdued ahead of Bailey speech
The pound (GBP) is treading water against the majority of its peers this morning as a lack of UK data releases sees Sterling struggling to find a clear direction.
GBP investors may also be reluctant to place any overly aggressive bets on the pound this morning ahead of an upcoming speech from the Bank of England’s (BoE) Governor Andrew Bailey.
As the Bank of England continues to adopt a softer approach to monetary policy than that of its other major central bank counterparts, Sterling could experience fresh headwinds this afternoon following Bailey’s speech.
Should the central banks governor reiterate an ‘aggressive’ approach to future UK interest rates, GBP exchange rates will likely slump on the back of rising BoE interest rate cut bets.
Euro (EUR) undermined by risk-on flows
The euro (EUR) is trading in a wide range this morning, trending mostly flat against the majority of its peers but faltering against its riskier counterparts, as markets return to upbeat trading conditions.
Amid an absence of any notable data releases from within the Bloc, the euro is trading mostly in line with risk dynamics.
As a safe-haven currency, this morning’s bout of cheery trade is serving to undermine the single currency against its risk sensitive counterparts.
Pound euro exchange rate forecast: central bank speeches to remain in the spotlight?
Looking ahead, the primary catalyst of movement for the pound euro exchange rate looking at tomorrow will likely continue to be several upcoming central bank speeches.
This time, the European Central Banks (ECB) President Christine Lagarde, alongside a number of other ECB officials, will deliver a series of speeches on Wednesday.
With markets anticipating several more interest rate cuts from the European Central Bank this year, any dovish hints that support this narrative will likely see the common currency slip against its peers.
Turning to the Pound, the theme of minimal UK data will continue into mid-week trade which will likely continue to see GBP exchange rates trade in line with market appetite for risk.
As an increasingly risk-sensitive currency, should this morning’s upbeat trading conditions prevail, GBP could rise moving into mid-week trade.
However, should markets revert to cautious trade and opt for safer assets instead, GBP exchange rates will likely trade on the back foot.