The Pound Sterling to Euro (GBP/EUR) exchange rate rallied by around 1.0% on Friday and prepared to close out the week in a stronger position.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Bullish on Friday
As it transpires, the UK’s public borrowing data had little impact on the Pound Sterling to Euro (GBP/EUR) exchange rate.
Although the Pound weakened against many of its peers as the UK’s political landscape shifted with a UKIP by-election victory, the GBP/EUR exchange rate was able to push back above the 1.26 level thanks to a particularly dovish speech from ECB President Mario Draghi.
The European Central Bank chief implied that policy makers are ready to adjust their asset purchase scheme and the Euro plummeted across the board in the hours following the announcement.
Earlier…
Pound Sterling to Euro (GBP/EUR) Exchange Rate On Hold before UK Borrowing Data
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced on Thursday on the back of an impressive increase in UK retail sales.
A decline in consumer confidence in the Eurozone also aided the Pound’s advance on its European rival.
The pairing was trending in a narrow range ahead of the the publication of the UK’s public borrowing data.
A less-than-impressive figure could push GBP/EUR back below 1.25 in the hours ahead.
Earlier…
GBP/EUR Exchange Rate Advances as Retail Sales Climb
The Pound Sterling to Euro (GBP/EUR) exchange rate received a modest boost on Thursday as UK retail sales surged by 0.8% on the month in October, smashing expectations for smaller sales growth of 0.3%.
After the report was published Reuters observed; ‘Consumer spending has driven Britain’s strong economic recovery which began in mid-2013 and is likely to remain its main engine as demand for exports remains weak due to the slowdown in the Eurozone. Wages are showing some tentative signs of recovery after growing by less than inflation for much of the period since the financial crisis, and consumer prices are rising by little more than 1%.’
However, as investors continue to bet that the Bank of England (BoE) will delay interest rate hikes until at least the second half of next year, Pound gains were limited.
The Confederation of British Industry’s trends selling/trends total reports also beat forecasts, with trends selling advancing from -3 to -1 and trends total rising from -6 to 3.
Earlier…
GBP/EUR Exchange Rate Bolstered by BoE Minutes
On Wednesday the Pound Sterling to Euro (GBP/EUR) exchange rate rallied as the minutes from the latest Bank of England (BoE) policy meeting showed a more hawkish attitude to the UK’s inflation outlook than anticipated.
The GBP/EUR pairing pushed back above 1.25 as the Pound gained across the board.
As stated by Jason Douglas; ‘The minutes imply that the seven-member consensus voting to keep rates on hold may weaken if the economy continues to expand strongly, potentially strengthening the faction pushing for tighter policy.’
While the Pound to Euro exchange rate has since given up some of those gains, the currency is still trending significantly higher than earlier in the week.
Eurozone PMI Disappoints, Euro Exchange Rate Pressured
As the European session got underway, the Euro came under significant pressure following the publication of manufacturing/services/composite PMI for the Eurozone and its largest economies.
All the preliminary estimates for France, Germany and the Eurozone as a whole came in below forecast levels, and many showed a decline on the previous month’s figures.
Notably, German Manufacturing PMI slumped from 51.4 to 50.0 – taking it right to the border between growth and contraction. The Services PMI for the Eurozone’s largest economy also dropped from 54.4 to 52.1 in November.
The German data saw economist Oliver Kolodseike; ‘Private sector output growth in Germany slowed to a 16-month low in November. Moreover, it seems Germany’s service sector has started to lose momentum, with activity growth in the sector the weakest since July last year, while manufacturing growth remained sluggish.
Companies reported that economic uncertainty and lower demand from both domestic and foreign markets hampered stronger growth in Germany’s private sector.’
However,GBP/EUR gains were limited ahead of the release of the UK’s retail sales report.
UK Retail Sales on Tap
In the hours ahead, the Pound Sterling to Euro (GBP/EUR) exchange rate could experience considerable movement as a result of the UK’s retail sales report.
A strong sales print would support the Pound and could push the GBP/EUR pairing to fresh weekly highs.
It has been forecast that retail sales climbed by 0.3% on the month in October following the previous month’s -0.3% decline.
Current Pound Sterling Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.5648,
Pound Sterling,,Euro,1.2491,
Pound Sterling,,Australian Dollar,1.8198,
Pound Sterling,,New Zealand Dollar,1.9938,
US Dollar,,Pound Sterling,0.6389,
Euro,,Pound Sterling,0.7997,
Australian Dollar,,Pound Sterling,0.5486,
New Zealand Dollar,,Pound Sterling,0.5001,
[/table]
