Pound to Euro Exchange Rate Struggles to Hold Best Levels despite Poor Eurozone Data
This week’s Eurozone data has repeatedly disappointed investors, but the Pound Sterling to Euro (GBP/EUR) exchange rate has struggled to hold its best levels. Lingering uncertainty over UK-EU relations means that lingering Brexit jitters are keeping pressure on.
Earlier in the week, GBP/EUR touched on a high of 1.2069 – the best level for the pair since the aftermath of the 2016 Brexit vote.
While GBP/EUR has slipped from those highs and currently trends closer to the level of 1.1953, the pair is still sustaining most of last week’s impressive gains.
The Pound (GBP) could advance again towards the end of the week if upcoming UK data impresses investors. However if tomorrow’s Eurozone stats impress the Euro (EUR) outlook may finally improve.
Pound (GBP) Exchange Rates Slide as Brexit Uncertainties Cast a Cloud
For much of the past week, investors have been optimistic around the UK government’s upcoming budget plan. There are hopes that the government will boost spending which could support a strong rebound in economic activity this year.
Sterling has benefitted strongly from these hopes, and strong domestic data has only helped. Yesterday’s inflation rate data beat forecasts, and this week’s job stats were also strong.
However, investors have been hesitant to keep the Pound near its best levels in years against the Euro. Investors have been selling the Pound from its highest levels in profit-taking and Brexit uncertainties are keeping the pressure up too.
Concerns persist that the UK and EU will maintain tough stances in negotiations. EU officials continue to warn that Britain will not get special treatment in regards to its financial sector.
This weighed on the Pound yesterday and caused it to tumble more easily.
Euro (EUR) Exchange Rates Struggle for Direction amid Lack of Strong Support
Investors have had little reason to buy the Euro in the past week. Strength in its rival the US Dollar (USD) as well as weak Eurozone data are keeping the Euro unappealing.
This week’s Eurozone ecostats have largely disappointed. ZEW economic sentiment and construction output data both came in well below forecasts.
Today’s data, including German consumer confidence and French inflation stats, largely met expectations.
Overall, the latest Eurozone data has done nothing to indicate that the Eurozone economy is seeing much of a recovery from months of concerning economic slowdown.
Amid concerns that the slowdown could continue, the Euro has been weak. This has meant the shared currency is struggling to push GBP/EUR down further from its best levels.
Pound to Euro (GBP/EUR) Exchange Rate Outlooks Await PMI Projections
The Pound outlook is being weighed by Brexit uncertainties, but the UK economic outlook is seemingly improving and is keeping the Pound relatively close to its highs.
On the other hand, the Euro is floundering amid a lack of solid support. Recent Eurozone data has been poor and is keeping markets concerned that the Eurozone slowdown will continue.
As a result, tomorrow’s upcoming UK and Eurozone PMI projections will give investors a much better idea of the outlook for both regions.
If Britain’s PMI projections beat expectations for example, hopes of a UK economic rebound will rise further and the Pound will be more likely to hold its best levels.
If Eurozone data impresses though it could finally give the Euro some stronger support. This would help the Euro to push GBP/EUR lower.
The Pound to Euro (GBP/EUR) exchange rate outlook also remains sensitive to Brexit developments.