Pound to Euro Exchange Rate Steadies Following Last Week’s Slip
Investors have been hesitant to move too much on the Pound Sterling to Euro (GBP/EUR) exchange rate over the past week, with many major markets seeing quieter activity amid the festive holiday season. Economists are anticipating upcoming data.
Last week saw GBP/EUR slide after opening at the level of 1.1736. While GBP/EUR edged higher towards the week and its losses were ultimately limited, the pair still closed the week lower in the region of 1.1705.
Since markets opened this morning, GBP/EUR has been trending close to the week’s opening levels.
Sterling (GBP) is struggling to sustain gains against the Euro (EUR) as US Dollar (USD) weakness leaves the Euro stronger.
Pound (GBP) Exchange Rates Steady Following Chaotic Month
The Pound hasn’t had a particularly festive month, experiencing a rollercoaster ride of movement on December’s UK General Election and Brexit developments.
While hopes for a Conservative Party majority government boosted soft Brexit hopes and the Pound earlier in the month, Prime Minister Boris Johnson has since indicated he would still prefer a hard Brexit to another Brexit delay.
This knocked the Pound over the past few weeks, and concerns that another year of Brexit uncertainty lies ahead is keeping a lid on the Pound’s potential for gains.
While Brexit jitters are in focus once again, markets are also anticipating upcoming UK data which could give investors a better idea of how Britain’s economy is handling Brexit uncertainty.
Euro (EUR) Exchange Rates Benefit from Weakness in Rival Currencies
The Pound’s attempts at rebounding from its lows took it higher towards the end of last week, but its gains against the Euro were still limited.
Signs of recovery in the Eurozone economy, combined with continued broad weakness in the US Dollar (USD), has left the Euro one of the market’s more strongly performing major currencies in recent sessions.
Recent Eurozone data has begun to show that Eurozone economic activity may finally have bottomed and could recover in the coming year. Hopes for Eurozone recovery caused investors to close short positions last week, boosting the Euro.
The safe haven US Dollar (USD) has been weaker as US-China trade optimism and hopes for a recovering global economy persist. As the US Dollar is the Euro’s biggest rival, this has bolstered the Euro further.
Pound to Euro (GBP/EUR) Exchange Rate Movement Limited as Markets Await Data and Brexit News
Until the New Year, there is little notable news expected for the Pound to Euro (GBP/EUR) exchange rate.
Investors are likely to continue digesting the year’s events and preparing for further Brexit uncertainty and Eurozone economic concern in 2020 for the remaining sessions of this year.
Many major markets will be closed to observe New Year celebrations on Wednesday, and notable data will follow in the first sessions of January.
On Thursday, Markit’s final December manufacturing PMIs for the Eurozone and UK will be published. If Eurozone manufacturing beats projections, the Euro could strengthen.
French and German inflation stats will be published on Friday. Any surprising Brexit developments would also influence the Pound to Euro (GBP/EUR) exchange rate over the coming days.