Pound Sterling (GBP) Exchange Rate Forecast to Strengthen against the Single Currency (EUR) after British Consumer Confidence Drops
The British Pound to Euro (GBP/EUR) exchange rate declined by around -0.5% during Friday’s European session.
British economic data produced disappointing results on Friday which caused the Pound to decline versus most of its currency rivals. July’s GfK Consumer Confidence Survey was forecast to drop from 7 to 5, but the actual result fell to 4. In addition, July’s Lloyds Business Barometer dropped from 55 to 50.
The Confederation of British Industry (CBI) released a growth report which stated that the British economy was on a ‘firm footing’. The accelerated pace of economic growth has been attributed to better-than-expected services sector strength. This report had minimal impact on the Pound however as trader focus was dominated by the disappointing ecostats.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.4195.
Euro (EUR) Exchange Rate Forecast to Trend Higher against the Pound (GBP) despite Mixed Data Results
Friday’s European data produced a mixed bag of results which erred towards the positive. This caused the shared currency to advance versus many of its closest currency competitors. German Retail Sales declined by -2.3% in June on the month, but rallied by 5.1% on the year. The Eurozone Consumer Price Index equalled the market consensus of 0.2% on the year in July, but the core measure bettered estimates with July’s result hitting 1.0%. On a more disappointing note, the Eurozone’s Unemployment Rate held at 11.1% despite predictions of a drop to 11.0%.
ING economist Bert Colijn says the 31,000 rise in Eurozone unemployment in June was disappointing, stating; ‘The increase was mostly due to Italy, which saw a jump in unemployment of 55k people, while most other European economies experienced declines. France saw a marginal increase, while unemployment in Germany, Spain and Netherlands continued to decline, indicating that the labour market is strengthening. The jump in the Italian unemployment rate to 12.7 percent is concerning, but business surveys indicate that a turnaround in employment growth in Italy could be around the corner as many businesses are planning on hiring. Economic conditions are also not in line with continued increases in unemployment for the rest of the year.’
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending within the range of 1.4170 to 1.4274 during Friday’s European session.
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