Pound to Euro Exchange Rate Near Highs as Euro Pulls Back
Investors sold the Pound (GBP) from a week of strong performance today, but the Pound Sterling to Euro (GBP/EUR) exchange rate remained near its best levels in over two months. The Euro (EUR) is also weakening today, which is helping the pair to avoid losses.
Due largely to broad weakness in the US Dollar (USD), GBP/EUR has been trending higher since opening last week at the level of 1.1096. GBP/EUR gained almost two cents and closed the week at the level of 1.1214.
After a brief dip on Monday, GBP/EUR has continued to climb this week. GBP/EUR touched on a high of 1.1246 last night – the best level for the pair since early June. At the time of writing, GBP/EUR trends a little lower in the region of 1.1235.
The Pound and Euro are both weakening today. However, the Euro outlook remains overall strong, so losses may be ahead for the pair.
Pound (GBP) Exchange Rates Pull Back from Highs amid UK Housing Report
The Pound fell back from its highs against many major currencies today. This was largely due to profit-taking as markets adjusted on the past week’s rally.
Sterling fell from its best levels as the US Dollar (USD) rebounded slightly from lows, and the Australian Dollar (AUD) was hit by poor Australian growth data.
GBP also found support in continued speculation that a coronavirus vaccine could arrive quicker than expected.
This week’s British data has thus far had little impact on the Pound’s appeal.
Today’s UK housing prices report from Nationwide showed an unexpectedly large rebound in housing prices – to all-time highs.
Euro (EUR) Exchange Rates Pulls Back from its own Highs in Profit Taking
The Euro fell from its best levels in profit-taking today, after hitting highs not seen since 2018 against its biggest rival the US Dollar (USD). The Euro saw little reaction to the day’s better than forecast German retail stats.
Investors are taking profit from Euro strength, but the currency remains generally appealing overall. The Eurozone outlook remains relatively strong due to its handling of the coronavirus pandemic, which has been seen as effective.
Some analysts have even expressed concern with how strong the Euro has gotten. According to Olaf Wortmann, Economist at VDMA Mechanical Engineering Industry Association in Germany:
‘The stronger Euro is clearly an additional burden for exporters, but what’s much more important is that global demand is generally quite low’
Pound to Euro (GBP/EUR) Exchange Rate Investors Await Final August PMIs
Today’s Eurozone data had little notable impact on the Euro, but investors are still likely to closely watch tomorrow’s anticipated data.
Thursday’s European session will see the publication of the Eurozone and UK’s final August PMIs from Markit. Services and composite stats will be published and the services figures could be particularly influential if they surprise investors.
Britain’s services sector makes up a notable chunk of the nation’s economic activity. As a result, tomorrow’s UK services PMI could knock Sterling lower if it disappoints investors.
July’s Eurozone retail sales report will be published tomorrow as well. Strong Eurozone retail data could bolster hopes for the bloc’s resilience amid the coronavirus pandemic.
German factory orders and Markit’s construction PMIs will round the week off on Friday.
Of course, any domestic coronavirus developments will also continue to influence the Pound to Euro (GBP/EUR) exchange rate outlook.
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