GBP/EUR exchange rate listless amid data-light calendar
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning as both UK and Eurozone data are in short supply.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1604, virtually unchanged from this morning’s opening rate.
Euro (EUR) to firm following German inflation?
The euro (EUR) is treading water against the majority of its peers this morning as data from within the Eurozone remains absent from this morning’s calendar.
However, undermining euro sentiment this morning are concerns over the general health of the Eurozone’s economy.
As the latest industrial production data from Germany continued to convey a confusing image in the bloc’s largest economy yesterday, EUR investors remain reluctant to place any overly aggressive bets.
Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, commented on the release:
‘The widespread belief that the eurozone recovery would accelerate significantly in the second half of the year has not materialised. At the beginning of the year, it seemed that the sector would recover from the recession, but doubts that emerged in June have been exacerbated by a further downturn in July.’
Looking ahead, Germany will release its finalised inflation rate for July which is forecast to tick up from a previous reading of 2.2% to 2.3%.
Should Friday’s data release confirm sticky inflation in Germany, this could underpin the euro during the latter stages of this week.
Pound (GBP) to be driven by risk appetite?
The pound (GBP) is trading sideways against the majority of its peers this morning as a continued lull in UK data releases sees the pound struggle to catch bids.
Further hobbling Sterling sentiment this morning are the ongoing far-right riots across the UK.
The current riots have stymied GBP exchange rates this week as they serve to undermine the UK’s return to political stability following the Labour government’s landslide victory.
Also tempering with the pound’s trade this morning is a risk-off market mood. As an increasingly risk-sensitive currency, this morning’s anxious trading conditions have further weighed on Sterling sentiment.
Looking ahead, as UK data will remain absent for the remainder of this week’s data calendar, the Pound could continue to be moved by market mood.
Will this morning’s souring mood prevail? Or will a shift to riskier assets lend GBP some modest support?
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