GBP/EUR exchange rate muted despite downbeat Eurozone data
The pound euro (GBP/EUR) exchange rate is trapped in a narrow range this morning despite the release of weaker-than-expected Eurozone retail sales data.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1661, virtually unchanged from this morning’s opening rate.
Euro (EUR) to fluctuate following ECB rate decision?
The euro (EUR) is being undermined this morning following the release of the Eurozone’s latest retail sales data.
The data printed at -0.5% in February, coming in below expectations of a -0.4% reading and dropped significantly from January’s downwardly revised 0% stagnation.
The data has set to temper EUR exchange rates this morning as concerns of continually weak consumer spending in the euro area remain.
Looking ahead to next week, the primary catalyst of movement for the euro exchange rate will be the European Central Bank’s (ECB) upcoming interest rate decision and its accompanying press conference.
As the ECB is widely expected to keep interest rates on hold at 4.5% during this month’s meeting, investor attention will turn to the accompanying forward guidance surrounding the future of monetary policy.
Should ECB officials signal that the bank will start cutting rates in June, EUR exchange rates may slump.
However, should policymakers deliver a hawkish stance and push back against upcoming interest rate cuts, the common currency could surge against its peers.
Pound (GBP) to slump following GDP?
The pound (GBP) traded mostly flat against the majority of its peers this morning as UK macroeconomic data remains thin on the ground.
As such, GBP investors turned their attention to continued Bank of England (BoE) interest rate cut speculation.
As markets continue to price in rate cuts to begin in June this year rather than later in the summer, Sterling sentiment has been significantly dampend.
Moving into next week, the theme of minimal data will continue and may leave GBP exchange rates struggling to find a clear trajectory for the majority of the week.
The one data release of note will come in the form of the UK’s latest GDP print for February, expected at the end of next week.
The data is forecast to report a contraction of 0.3% following a previous reading of 0.2%.
Should the data print as expected, the pound may falter against its peers on the back of renewed concern over the overall health of the UK economy.
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