Risk of EUR/GBP Exchange Rate Slowdown on Falling Economic Confidence
Looking ahead, the EUR/GBP exchange rate might drop on the week ahead when Eurozone confidence data is released on Tuesday morning.
Current expectations are for the readings to decline across the board, with a reduction in business confidence and economic sentiment on the cards.
If a majority of the readings reveal falling sentiment then the Euro could slide against the Pound, given the negative implications for future Eurozone economic growth.
Eurozone GDP Growth Rate Stats could Trigger EUR/GBP Exchange Rate Turbulence
The Euro (EUR) risks making additional losses on Tuesday next week when GDP growth rate data for Q3 2018 comes out.
Some economists are predicting a slight drop in the pace of year-on-year GDP growth, with a dip from 2.1% to 1.9%.
Such a result might unsettle Euro traders and lead to a loss against the Pound, given the negative implications of such news.
That said, other analysts are anticipating a much better rise from 2.1% growth to 2.5%; this could instead cause a Euro rally and push the EUR/GBP exchange rate higher.
The quarterly estimate is a similar story – some expected a reprint at 0.4%, but others are anticipating a rise to 0.5% growth.
It is worth noting that there may be high EUR/GBP exchange rate volatility on Tuesday, as the afternoon will bring German inflation rate figures for October.
A faster pace of year-on-year growth is anticipated, alongside a slowdown for the monthly reading.
Faster inflation in Germany can lead to faster Eurozone-wide inflation, so the Euro might ultimately advance against the Pound by the end of a busy Tuesday next week.
Pound Sterling to Euro (GBP/EUR) Volatility Forecast on UK Budget Reveal
For Pound Sterling (GBP) traders, the next major data will be Monday’s Autumn Budget reveal by Chancellor Philip Hammond.
This is an eagerly anticipated announcement from the Chancellor, as it will reveal his spending plans for the 2019 Brexit transitional period.
Some are calling for increased spending due to improving economic conditions, while others believe that it is still too early to loosen the Treasury’s purse strings.
If more spending is on the menu then the Pound could rise due to trader confidence; on the other hand, a still-cautious outlook could unsettle GBP traders and cause losses.
Will Falling Consumer Confidence Drag GBP/EUR Exchange Rate Down?
The Pound (GBP) could make midweek losses against the Euro (EUR) in the week ahead, when UK consumer confidence data comes out on Wednesday.
GfK’s consumer sentiment reading is expected to show a decline compared to September, with a shift from -9 points to -10 or -11.
Lower consumer confidence opens the door to reduced consumer spending and falling GDP, so such results could cause a Pound Sterling decline.