The Euro to Pound Sterling (EUR/GBP) exchange rate softened by around -0.14% on Friday morning.
After German retail sales softened beyond expectations, the shared currency slumped versus the majority of its most traded rivals. The Pound, meanwhile, is generally trending higher against its major peers after trade balance data narrowed significantly.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7806.
In the aftermath of disappointing domestic data, the Euro slumped versus nearly all of its major peers. Compounding the declination was minutes from the Federal Reserve Open Market Committee meeting, which highlighted the extent of the economic divergence between the Federal Reserve and The European Central Bank. The Pound, meanwhile, is generally trending lower against its most traded rivals after the Bank of England failed to alter monetary policy.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7813.
Euro (EUR) Exchange Rate Softens on Ecostats
In the wake of a disappointing set of European economic data publications, the shared currency slumped versus the majority of its most traded currency rivals. German factory orders declined on both a monthly and yearly basis. Eurozone Economic Confidence held at 100.7, despite the median market forecast of a rise to 101.2. Eurozone Industrial Confidence declined to -5.2 despite the market consensus of a rise from -4.3 to -4. Eurozone Retail Sales also declined from the previous figure after an upwards revision.
‘Growth is very weak,’ said Nick Kounis, head of macro research at ABN Amro Bank NV in Amsterdam. ‘Policy makers need to do what they can to support demand. The economy can do with more monetary stimulus.’
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped to a low today of 0.7807.
Pound Sterling (GBP) Exchange Rate Softer on BoE
With most industry experts in agreement with regards to the likelihood of inaction from the Bank of England policymakers, the Pound declined against many of its most traded rivals. Once it emerged that the Bank of England did fail to act, the declination was minimal because a fall had already been priced-in. House price data also failed to support Sterling gains. The Halifax House Prices increased by 0.9% in December, bettering estimates of only 0.3% growth. However, on a yearly basis, House Prices dropped from 8.1% to 7.8%, although still eclipsing the forecast growth of only 7.6%.
‘We expect a further moderation in house-price growth over the coming year,’ said Martin Ellis, housing economist at Halifax. While he sees a ‘deterioration in housing affordability,’ a stronger economy and rising wages should support the market.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast to Extend Losses
With sentiment towards the ECB ever dwindling, and given that a significant Sterling declination has already been priced-in, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to continue trending lower.
The Euro to Pound Sterling (EUR/GBP) exchange rate climbed to a high today of 0.7856.