The Pound Euro (GBP EUR) exchange rate recovered from an eight-year low today as UK mortgage data beat expectations in July.
Investors Seek to Profit on Sterling’s (GBP) Lows as Mortgage Approvals Rise
A combination of markets seeking to profit from Sterling’s eight-year low and some relatively upbeat housing data helped to revive the UK currency today, with investors choosing to focus on the UK’s latest mortgage approval figures.
According to data released by the Bank of England (BoE) new home loan approvals surged from 65,200 to 68,600 in July, beating expectations they would only rise to 65,500.
However slightly diminishing the Pound’s gains today was the accompanying consumer credit figures from the BoE as they revealed that credit slumped from £1.3bn to £1.1bn over the same period, with some analysts suggesting this provides with bank will more wiggle room to leave interest rates on hold.
Euro (EUR) Bolstered as German Inflation Surges Past Expectations
Meanwhile the Euro slowed the Pound’s advance this afternoon as German inflation accelerated more than predicted this month.
According to the CPI data released by the Federal Statistics Office, Destatis Germany’s inflation rate jumped from 1.5% to 1.8% in August, outpacing forecasts it would rise to 1.7%.
Markets are hopeful that today’s data will place further pressure on the European Central Bank (ECB) to begin tightening its monetary policy, with the bank set to meet next week amidst speculation that ECB officials will begin discussing the tapering of its quantitative easing programme.
However while Germany’s inflation rate may be nearing the central bank’s target rate of 2% overall Eurozone figures still lag well behind at just 1.3%, which could leave ECB President Mario Draghi to remain quiet on the issue of winding down stimulus in his post meeting speech on Thursday.
GBP EUR Forecast: UK Consumer Confidence to Dip?
Looking ahead the GBP EUR exchange rate may tumble again on Thursday morning with the release of the UK’s latest consumer confidence figures, with economists forecasting that the index will slip from -12 to -13 in August as household sentiment continues to be pressured by rising inflation and weak wage growth.
Meanwhile the Euro may advance tomorrow as analysts predict that Germany’s latest employment data will reveal that the jobless rate held at a record low this month.
Current Interbank Exchange Rates
At the time of writing the GBP EUR exchange rate was trending around 1.0839 and the EUR GBP exchange rate was trending around 0.9222.
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