GBP/EUR Exchange Rate Flat as UK GDP Stalls
The Pound Euro (GBP/EUR) exchange rate is trading in a narrow range this morning as markets react to the UK’s latest GDP figures.
At the time of writing the Pound Euro GBP/EUR exchange rate is virtually unchanged this morning, with the pairing trading slightly below the two-month high struck earlier this morning.
Pound (GBP) Exchange Rates Tread Water as UK Growth Flat in August
The Pound is struggling to advance this morning after UK GDP came in lower-than-expected at the end of the summer.
According to data published by the Office for National Statistics (ONS), UK GDP stalled in August, down from a 0.4% growth in July and missing expectations of a modest a 0.1% expansion.
This lacklustre reading appeared mostly driven by a 0.7% contraction of growth in the UK construction sector as well as flat growth in the UK’s all-important services sector.
However the GDP figures weren’t all doom and gloom as an upwards revision to July’s growth figures saw the UK economy still expand 0.7% over the three months of summer, the fastest pace of growth since early 2017.
Euro (EUR) Muted as Italian Finance Minister Calls for Calm over Italy’s Budget
Meanwhile, while the Euro (EUR) is treading water this morning after Italian Finance Minister Giovanni Tria’s attempts to dispel some of the concerns over Italy’s budget.
While Tria called for calm over Rome’s plans to run a budget deficit of 2.4% in 2019, his remarks were undermined by his own admittance of worries regarding Italy’s ‘unacceptable’ bond yield spread.
Tria told lawmakers in Rome yesterday:
‘Although so far there hasn’t been an explosion as some feared, we are of course worried. As a responsible government we aim to explain the budget and thus guide investors in our meetings in order to calm markets.’
GBP/EUR Exchange Rate Forecast: Will an Upbeat Tone from the BoE’s Vlieghe Bolster Sterling?
Looking ahead, the Pound Euro (GBP/EUR) exchange rate may strengthen in the second half of this week’s session as markets look to a speech by the Bank of England’s (BoE) Gertjan Vlieghe on Thursday for any hints on how recent Brexit developments may have impact the bank’s outlook.
This may see Sterling press higher tomorrow, should the recent progression in Brexit negotiations lead to the BoE policymaker striking a more hawkish tone tomorrow.
Meanwhile, with the minutes from the European Central Bank’s (ECB) latest policy meeting not expected to deliver any surprises on Thursday, EUR investors may turn their attention to Friday’s Eurozone industrial production figures, with the Euro potentially strengthening if production rebounds as forecast in August.