Pound euro exchange rate muted ahead of ECB speech

Pound euro exchange rate flat amid data-light morning

The pound euro (GBP/EUR) exchange rate is trapped in a narrow rage this morning as an absence of both UK and Eurozone economic data this morning has left the currency pairing mostly flat.

At the time of writing, GBP/EUR is trading at around €1.2035, virtually unchanged from this morning’s opening levels.

Euro (EUR) rangebound ahead of ECB speech

The euro (EUR) is struggling to garner investor attention this morning as economic data from within the Bloc is thin on the ground this morning.

EUR investors are also likely reluctant to place any overly aggressive bets on the common currency ahead of a forthcoming speech from European Central Bank (ECB) President Christine Lagarde.

As ECB rate bets continue to rise, any dovish commentary from the central banks President this afternoon could furl these bets further, and in turn weigh on the single currency during the second half of today’s European session.

Pound (GBP) flat amid data lull

The pound (GBP) is treading water against the majority of its peers this morning as a lack of domestic data releases sees Sterling struggling to find a clear trajectory.

However, GBP investors may still be deterred by yesterday’s public borrowing figures.

The Office for Budget Responsibility (OBR) revealed that the UK’s public borrowing figures came in well above forecast, rising from £13.5bn to £16.6bn, ahead of a more modest £10.3bn estimate.

This saw current fears over the upcoming Autumn Budget rise, undermining Sterling sentiment as a result.

Pound euro exchange rate forecast: PMIs in the spotlight

Looking ahead, the primary catalyst of movement for the pound euro exchange rate looking at tomorrow will likely be the publication of both the UK’s and the Eurozone’s latest PMI data.

Looking at the pound, should October’s services index confirm that the sector remained in the expansion zone (a reading over 50) and began to accelerate again this month, GBP exchange rates could firm towards the latter stages the week.

Similarly, the UK’s manufacturing index is also forecast to remain in expansion territory which will likely offer Sterling some additional support.

Turning to the euro, an expected mixed PMI reading, with the services index forecast to remain just above the expansion zone whilst manufacturing is expected to remain firmly in contraction territory, could see the single currency struggle to catch bids in the wake of the release.

However, should the Bloc’s services or manufacturing sectors exceed forecasts, this could cap potential EUR losses as a result.

Sarah Ebrahem

Contact Sarah Ebrahem


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