On Thursday the GBP/EUR exchange rate continued to trade above the 1.26 level but volatility is forecast after German unemployment fell and market attention shifts to upcoming German inflation data.
On Wednesday the Pound to Euro exchange rate was trading in the region of 1.26 as economists took a wait and see approach to upcoming UK GDP data.
The GBP/EUR exchange rate was trading around the 1.26 level later on Tuesday as dovish comments by Bank of England Governor Mark Carney continued to weigh on Sterling.
Earlier in Tuesday’s session progressed the GBP/EUR exchange rate settled into a tight range as warning over the Eurozone economy softened the Euro and as Bank of England policy makers warned that UK inflation is likely to slide below 1%.
The Pound to Euro (GBP/EUR) exchange rate softened earlier on Tuesday after data showed that business sentiment in France improved more than forecast in November and as German GDP data confirmed that the Eurozone’s largest economy avoided sliding into recession in the third quarter of the year.
GDP data released by the German Federal Statistics Office confirmed that the German economy expanded slightly in the third quarter. The report showed that German GDP expanded by just 0.1% in adjusted terms, an improvement on the -0.1% contraction seen in the second quarter.
On an annual basis the German economy expanded by 1.2% in the third quarter compared with the same time as last year, the figure was unchanged from a first assessment.
Despite the avoidance of recession, economists remain concerned over the health of the Eurozone economy. The German GDP data whilst an improvement on the second quarter was the lowest since the three months through to December 2013.
A separate report out of France showed that business sentiment among manufacturers in the Eurozone’s second largest economy improved in November. According to the data, the nation’s business confidence index rose to a reading of 99, up from the preceding month’s figure of 98. The figure was better than the 97 forecast by economists.
Sterling meanwhile was softened by a report, which showed that mortgage-lending fell steeply last month as tighter controls on lending continue to curb borrowing rates and cool the UK’s housing market.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
The Pound is likely to experience movement as the session progresses as market attention turns to a speech due to be given by Bank of England Governor Mark Carney.
Mr Carney is due to testify before parliamentarians and his speech could give the Pound direction.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound,
,Euro , 1.2625,
US Dollar,,Euro , 0.8008,
Canadian Dollar,,Euro , 0.7117,
Australian Dollar,,Euro , 0.6862,
New Zealand Dollar,,Euro , 0.6320,
[/table]
