GBP/EUR Exchange Rate Rangebound, Could a Bullish ECB Monetary Policy Statement Boost the Single Currency?
The Pound Euro (GBP/EUR) exchange rate held steady this morning ahead of the European Central Bank’s (ECB) interest rate decision this afternoon. The pairing is currently trading around €1.16.
Euro (EUR) investors have become more confident about the outlook for the Eurozone economy despite mixed economic data.
Analysts at Reuters explains:
‘The European Central Bank is expected to claw back stimulus […], taking a token step towards unwinding the emergency aid put in place during the pandemic while still signalling copious support for years to come.’
Today also saw the release of the latest German trade balance data which indicated a widening of trade surplus, with exports coming in stronger-than-expected in July compared to June.
Xavier Fontdegloria, writing for Dow Jones, commented on the data:
‘Germany’s trade surplus widened in July as exports continued to grow while imports fell amid widespread supply-chain strains that are leading to shortages in raw materials and components.
‘Germany’s trade surplus–the balance of exports and imports of goods–stood at 17.9 billion euros ($21.15 billion) in calendar and seasonally adjusted terms in July, data from the country’s statistics office Destatis showed Thursday.’
Could a more bullish tone from the ECB later today drive-up the EUR/GBP exchange rate?
Pound (GBP) Exchange Rate Steady, Could Rising Covid-19 Infections Drag Down Sterling?
The Pound (GBP) has found little in the way of support this week following the UK Government’s hints at a possible ‘firebreak’ Covid-19 lockdown next month.
Despite UK Health Secretary Sajid Javid’s denial, Pound investors have become more concerned about rising Covid-19 infections and hospitalisations.
‘I don’t think that’s something we need to consider. I haven’t even thought about that as an option at this point.
‘I think the decisions that we’ve made in the last few weeks and certainly in the time I’ve been Heath Secretary, I think they’ve turned out to be the right decisions.’
In absence of UK economic data today, however, we could see the Pound Euro exchange rate begin to fall should infections and hospitalisations increase.
GBP/EUR Exchange Rate Forecast: UK Industrial and GDP Data in Focus
Pound (GBP) traders will be looking ahead to tomorrow’s release of the latest UK industrial production data for July. Any indications of growth in the industrial sector would be GBP-positive.
Tomorrow will also see the release of the final UK gross domestic product data for July. If this shows further growth in the UK economy, then the Pound Euro exchange rate would head higher.
Euro (EUR) investors will monitor tomorrow’s speech from the ECB’s President Christine Lagarde. Could a bullish statement from Lagarde boost the EUR/GBP exchange rate?