Pound Sterling Euro (GBP/EUR) Exchange Rate Flat as France’s Unemployment Worries Ease
The Pound Sterling Euro (GBP/EUR) exchange rate remained flat this morning. This left the pairing trading at around €1.1130.
The single currency remained flat this morning after the latest data showed French consumer confidence held steady in August.
INSEE statistics agency revealed confidence held at 94 as unemployment worries decreased further in the country.
The latest data showed households’ worried about joblessness tumbled to the lowest level since April when the bloc’s second largest economy was still in a two-month lockdown.
Although, EUR remained under pressure as while general outlook was stable, it was below the long-term average.
Pound (GBP) Muted as Risk Appetite Slides Ahead of Fed Chair Speech
Meanwhile, Sterling remained flat on Wednesday after rising against the majority of its rivals during Tuesday’s session.
The British currency was mainly driven by the increase in risk sentiment after reports of a successful phone call between US and Chinese officials.
GBP shrugged off downbeat data which revealed Britain’s monthly retail sales fell unexpectedly in August.
Morten Lund, Nordea Markets analyst noted:
‘It’s much more about general risk sentiment. We also have a weaker dollar that has to some extent helped Sterling.’
However, the Pound struggled to make gains against the Euro today as traders awaited the latest US data and a key speech from the US Federal Reserve chief.
Risk sentiment fell during today’s session ahead of the highly-anticipated speech from the Federal Reserve’s Jerome Powell.
According to Minori Uchida, head of global market research at MUFG Bank in Tokyo:
‘I expect Powell to use forward guidance to send a dovish message that rates will remain low for a long time, which feeds into Dollar weakness.
‘You could say we are in a long-term correction of excessive Dollar strength.’
A slump in the US Dollar is likely to continue to benefit both the Pound and the Euro. Although, weak US data later today could weigh on the riskier Sterling.
Pound Euro Outlook: Will a Dovish BoE Send GBP Lower?
Looking ahead to the end of today’s session, the Pound (GBP) could suffer losses against the Euro (EUR) following a speech from the Bank of England’s (BoE) chief economist.
If the BoE’s Andy Haldane makes any comments about sending interest rates into negative territory, it will weigh on Sterling sentiment.
Meanwhile, the single currency could extend any gains on Thursday as traders focus on the latest French business confidence data.
If August’s Business Confidence jumps higher than expected in the bloc’s second-largest economy, it will send the Pound Euro (GBP/EUR) exchange rate lower.