GBP/EUR Exchange Rate Steady as French Business Climate in Manufacturing Improves
The Pound to Euro (GBP/EUR) exchange rate held steady this morning, with the pairing currently trading around €1.116.
The Euro (EUR) failed to gain on the Pound (GBP) today as EUR traders eye America’s Jackson Hole symposium, hosted at the Kansas City Federal Reserve. Owing to the volatile year markets will be paying close attention to announcements from the world’s central bankers, who will be attending the symposium.
Lars Merklin, Senior Analyst at Danske Bank, commented:
‘Our focus is on further USD-negative policies versus the fairly high bar set by consensus expectations. We continue to see near-term risks tilted to the downside in spot but will obviously reflect on such views after having heard Powell speak.’
With the Euro positively-correlated with the US Dollar, any USD-negative news would boost the EUR/GBP exchange rate today.
In Eurozone economic news, today saw the release of the French business climate in manufacturing figure for August. This beat forecasts and rose from 82 to 93, buoying confidence in one of the Eurozone’s strongest economies.
Euro (EUR) investors will also be looking ahead to this afternoon’s speech by Philip Lane, a member of the Executive Board of the European Central Bank (ECB). Any dovish comments about the bloc’s economy would drag down the single currency.
Pound (GBP) Steady as Germany Scraps Plans for Brexit Talks at EU Ambassadors’ Summit
The Pound (GBP) has remained under pressure today from rising fears over the possibility of a no-deal Brexit on December 31st. This follows reports that Germany scrapped plans for Brexit talks at the EU ambassadors’ summit.
Sandro Gozi, an Italian politician at the Democratic Party and Member of the European Parliament, commented:
‘I have always thought – that is my personal position – that no-deal was a real option especially on London’s side … Every day that passes without concrete progress is a day closer to no-deal Brexit.’
Last week also saw the EU’s Chief Negotiator, Michel Barnier, said that he was surprised that the UK appeared to be ‘wasting valuable time’ in outlining a deal.
GBP/EUR Forecast: Could a Dovish Bank of England Drag Down Sterling Tomorrow?
Euro (EUR) investors will be looking ahead to tomorrow’s release of the French GDPI figure for the second quarter. If this drops by the forecast -13.8%, however, we could see the single currency drop.
Tomorrow will see the release of September’s German GfK Consumer Confidence Survey, which is expected to rise to 1.2. As a result, we could see the EUR/GBP exchange rate rise as the outlook for the Eurozone’s largest economy improves.
In UK news, Friday will see a speech delivered by Andrew Bailey, the Bank of England’s (BoE) Governor. If he is notably dovish about the UK’s economic performance, then we would see the GBP/EUR exchange rate slide.
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