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GBP/EUR Exchange Rate to Remain Muted ahead of EU Data?

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GBP/EUR Exchange Rate to Stay Rangebound Until ECB Speeches?

The Pound Euro (GBP/EUR) exchange rate is trading in a narrow range this morning, as EUR investors wait for data and speeches.

At the time of writing the GBP/EUR exchange rate is trading at around €1.1423 which is virtually unchanged from this morning’s opening rate.

Euro (EUR) to Strengthen on Hawkish ECB Rhetoric?

The Euro (EUR) is rangebound this morning ahead of multiple European Central Bank (ECB) speeches due today.

It’s possible the comments from ECB policymakers could strengthen the Euro this morning. Fabio Panetta, Andrea Enria and Luis de Guindos will be speaking throughout the day. The ECB recent rhetoric has been broadly hawkish

Investors will be listening for any hints of the central banks’ next hike. There are concerns about future slowing of policy tightening, however at the moment a 75bps hike is expected at the next meeting. If the policymakers tone reflects this the Euro could enjoy tailwinds today.

Elsewhere, economists are expecting the Eurozone’s industrial production to drop from 1.5% in August, to 0.3% in September. If true, this could put pressure on the Euro.

Pound (GBP) Steady ahead of Packed UK Data Calendar

The Pound (GBP) is muted ahead of a week packed with high-impact UK data.

On Tuesday, employment data will likely drive the Pound. Economists are expecting the unemployment rate to remain unchanged from 3.5% in September. However, average earnings are expected to drop from 6% to 5.9%. If the data prints differently than expected then this could signal a cooling job market, which will likely weigh on the Pound.

Wednesday will likely be the main focus as investors trade on inflation data. Headline inflation is expected to rise from 10.1% to 10.7%.

If this prints as true, the Pound could gain ground on the expectation of an aggressive interest hike from the Bank of England (BoE). However, it’s also possible that the Pound could remain under pressure as the UK’s economic outlook continues to weigh in on trade.

Elsewhere, the Autumn Statement, which is expected on Thursday, will likely cause significant movement in Sterling. Chancellor Jeremy Hunt will deliver the statement, focusing on spending plans and government tax. If investors react poorly to the statement, then the Pound could face headwind. If, however, Hunt has budgeted for cost-of-living support in the statement, then GBP could gain ground.  

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