GBP/EUR Exchange Rate to Be Driven by UK Recession Woes?
The Pound Euro (GBP/EUR) exchange rate is plummeting this morning as the recessionary pressures begin to hit UK businesses.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1400, which is down roughly 0.5% from this morning’s opening rate.
Pound (GBP) to Remain Under Pressure Due to Recession Fears?
The Pound (GBP) is down against the majority of its peers this morning as mounting evidence of a UK recession troubles investors.
Today, domestic headlines are highlighting how many major retailers across the UK have had a drop in sales heading into the winter period.
Marks and Spencer’s reported a drop in profits by almost 24% in the last six months. In a statement the retailer said they are bracing for the ‘gathering storm.’ This bleak sentiment was echoed by other UK businesses this morning as the economic downturn begins to take hold.
Looking ahead, a continued lack of data could drive investors to focus on domestic concerns and central bank speeches. Bank of England (BoE) policymaker Silvana Tenreyro is due to speak tomorrow. Dovish comments from Tenreyro could sink the Pound even further.
Elsewhere, the increasingly risk-sensitive Pound could also move in line with risk sentiment as the market mood begins to sour.
Euro (EUR) to Climb as Ukraine Attempts to Regain Land?
The Euro (EUR) is trading in a broad range this morning as fighting escalates within Ukraine.
According to reports Ukrainian forces are attempting to retake some territory. Vitaly Kim, the Ukrainian governor of Mykolaiv region has said about the attempt:
‘Russian troops are complaining that they have already been thrown out of there.’
Further developments within Ukraine could affect the Euro. If Ukraine forces manage to retake more territory, then the single currency could gain support. If, However, the Russians continue to attack the country’s infrastructure the EUR could be dented.
Looking ahead, a lack of data releases on Thursday could see investors focus on Germany’s inflation figures on Friday.
October’s final reading for headline inflation is expected to show an increase from 10% to 10.4%. The single currency could climb on the expectation of further aggressive interest rate hikes from the European Central Bank (ECB).