The Euro has been battered recently by German retail sales results, but could stage a recovery on a string of supportive Eurozone data.
The Pound has been harmed recently by speculation about the Bank of England’s (BoE) Governor; in the future, broader news from the BoE may have a greater influence on Sterling.
EUR GBP Exchange Rate News; Euro Devalued by German Sales, Pound Harmed by Carney Speculation
Euro Pound exchange rates have dropped off sharply of late, owing to the latest data releases from Germany. In a concerning development, the Eurozone’s strongest economic member has recorded a slump in retail sales in September from 3.8% to 0.4% on the year and from -0.3% to -1.4% on the month.
Although the Eurozone-wide GDP growth rate and inflation rate figures for Q3 and October have beaten pessimistic forecasts, this has not been enough to see the Euro recover against its regular peers.
In the UK, the Pound has had a rough start to trading on account of recent scrutiny of Bank of England (BoE) Governor Mark Carney.
Following earlier criticism of the BoE by Prime Minister Theresa May, rumours have been circulating about whether Carney will resign in the near-term due to allegations of breaking neutrality during the EU Referendum.
Euro Exchange Rate Forecast: Can the Eurozone Recover Enough to Satisfy the ECB?
When it comes to future Euro influencers, it will be worth keeping an eye on both German and Eurozone-wide announcements.
In the former case, the latest alarming drop in German retail sales has raised serious questions about how the key Eurozone member will cope in the future, while a previous rise in preliminary inflation figures for October has only further confused the issue for speculators.
Rising inflation is closely linked to the odds of the European Central Bank (ECB) tightening monetary policy. As it stands, however, the single currency bloc could require a successive string of forecast beating results before any action is taken on this front.
Future BoE Actions to Weigh Heavily on Pound Sterling Going Ahead
When it comes to future Pound shifts, the BoE is expected to factor heavily into this movement.
Outside of whether Carney stays or leaves the institution in the near-term, the other key point will be whether the BoE reacts hawkishly to recent signs of a limited Brexit impact.
Key among these have been the forecast-beating GDP growth rate results for Q3, though a seemingly rapid recovery of PMI scores also raised optimism in the aftermath of the Brexit vote.
Should the BoE start to err on the side of hiking UK interest rates again, Pound Euro exchange rates could strengthen, potentially returning to its post-referendum average against the Euro.
Recent Interbank Exchange Rates
At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.90 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.11.
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