GBP/EUR Exchange Rate Stable as Italian Growth Forecast Slashed
The Pound Euro (GBP/EUR) exchange rate is mostly rangebound this morning following on suggests that Italy’s economy will likely stagnate this year.
At the time of writing the GBP/EUR exchange rate is virtually unchanged this morning, leaving the pairing trading at around €1.1165.
Euro (EUR) Undermined by Gloom Italian Growth Forecast
The Euro (EUR) finds itself struggling to find momentum against the Pound (GBP) this morning on expectations that Italy’s economy will stagnate this year.
Rating agency Standard & Poor’s announced that it now expects Italy’s economy to grow by just 0.1% in 2019, that’s down from the 0.7% forecast earlier in the year.
This is likely to compound concerns over Italy’s debt pile and its ability to reduce it, something that is at the centre of Rome’s fiscal dispute with Brussels.
Pound (GBP) Stable on Robust UK Mortgage Figures
Meanwhile the Pound (GBP) is holding steady this morning following the publication of the latest UK mortgage figures.
UK finance reported that 42,384 mortgages were approved by UK bank’s last month up 8.7% year-on-year and coming just short of the two-year high struck in April.
While GBP investors were slightly disappointed to see mortgages fall short of the 43,200 forecast, the report adds to evidence that the UK housing market is strengthening.
However analysts warn this upswing may prove temporary, with consumer likely to hold off on major purchases again as we near the new Brexit deadline in October.
GBP/EUR Exchange Rate Forecast: Sliding Eurozone Business Confidence to Drag on the Euro?
Looking ahead, the Pound Euro (GBP/EUR) exchange rate looks likely to rally as we enter the latter half of the week, following the publication of the Eurozone’s latest business confidence figures.
Economists forecast that business sentiment is likely to have continued to decline in June as downside risks from global trade tensions and slowing domestic growth cast a sense of gloom over the bloc, likely dampening the appeal of the Euro.
Meanwhile, the UK’s final GDP reading for the first quarter will be published on Friday, potentially lending some support to Sterling as it is expected to confirm that the UK economy expanded by a healthy 0.5% at the start of the year.