The recent fluctuations in the Euro Pound (EUR GBP) exchange rate continued this morning following another uptick in Eurozone economic data.
Euro (EUR) Rallies as Eurozone Industrial Production Booms
The Euro found itself rallying again this morning following a brief dip in overnight trade, with the single currency being pushed higher by a sharp uptick in Eurozone Industrial Production.
According to data published this morning by the European Union statistics office Eurostat, the bloc’s industrial output rocketed from a revised 0.3% to 1.4% in August, easily outpacing expectations of a more modest 0.5% rise.
The jump was largely attributed to a 3.1% surge in capital goods production, with a 1.3% rise in consumer goods output also contributing.
While industrial production is known to fluctuate from month to analysts suggest that the uptick in August bodes well for the Eurozone’s economic growth, especially given that the rise in demand capital goods output suggests that business investment is continuing to tick higher.
Brexit Concerns Weigh on Pound (GBP)
Meanwhile the Pound remains subdued this morning as investors await the closing statements from the fifth round of Brexit negotiations.
Brexit Secretary David Davis and the EU’s chief Brexit negotiator Michel Barnier are both expected to discuss the current state of negotiations later today, with EU officials describing a ‘constructive mood’ in recent negotiations.
However despite the sense of gathering momentum in talks a lack of any major breakthrough in talks still suggests that EU leaders will still vote next week to delay the second stage of talks.
EUR GBP Forecast: Central Bank Speeches Ahead
Looking ahead the EUR GBP exchange rate may advance further this afternoon depending on the tone of a speech by European Central Bank (ECB) President Mario Draghi.
Markets will be hoping that Draghi may drop some hints about the possibility of the bank tightening its monetary policy in the coming months, with any suggestion that the ECB is planning to discuss the tapering its quantitative easing programme next year, likely to drive the Euro higher.
Meanwhile Sterling may also see some movement this afternoon following a speech by Bank of England (BoE) Chief Economist Andy Haldane as investors look for any clue on whether Haldane may support a rate hike in November.
Current Interbank Exchange Rates
At the time of writing the EUR GBP exchange rate was trending around 0.8967 and the GBP EUR exchange rate was trending around 1.1151.