UPDATE
The Euro to Pound Sterling (EUR/GBP) exchange rate rallied by around 0.6% on Monday afternoon.
Data from the Confederation of British Industry showed Reported Sales jumped from 7 to 19 in December, but failed to meet with the median market forecast jump to 21. However, the Pound is still holding a position of strength versus most of its major peers given that the data was still comparatively robust. The single currency, meanwhile, strengthened versus most of its currency rivals after Eurozone Consumer Confidence bettered estimates.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7340.
Earlier…
EUR/GBP Exchange Rate Edges Lower on Disappointing German Producer Prices
The Euro to Pound Sterling (EUR/GBP) exchange rate softened fractionally by around -0.2% on Monday morning.
With traders beginning to settle down for the Christmas break, thin trading volume could see heightened market volatility with greater reactions to lesser data publications. In the early stages of Monday’s European session the single currency declined following a bigger-than-anticipated drop in November’s annual German Producer Prices. However, the losses were paired back a little with demand for safe-haven assets rising in the face of falling crude prices and the resultant trader risk-aversion strategies.
Later today, Eurozone Consumer Confidence data has the potential to provoke Euro volatility. If December’s Euro-area consumer confidence matches the median market forecast -5.9 the single currency is likely to decline versus its peers. In addition, is US data prints positively and causes the US Dollar to rise the common currency is likely to dive thanks to EUR/USD negative correlation.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7284.
GBP/EUR Exchange Rate Predicted to Hold Gains ahead of Confederation of British Industry Data
As mentioned above, thin trading volume is likely to see a greater-than-normal reaction in the FX market to low impact data publications. Therefore, December’s Reported Sales report from the Confederation of British Industry is very likely to provoke Sterling volatility. December’s CBI Reported Sales is predicted to advance from 7 to 21 which may account for the fractional Sterling appreciation seen since the European session opened today.
Even a very positive result from domestic data may not provoke a marked Sterling uptrend, however, with many traders convinced that the Bank of England (BoE) will not be in a position to tighten monetary policy until deep into 2017. This is due to the lack of inflationary pressures, an issue shared by many of the developed nations, as crude oil continues to hold a weak position. With little sign that the price of oil will advance in the near-term, global inflationary pressures are predicted to remain absent.
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped to a low today of 0.7277.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Forecast: UK and German Consumer Confidence to Provoke Volatility on Tuesday
There will be a number of British and European economic data publications on Tuesday with the potential to provoke changes for the Pound Sterling to Euro (GBP/EUR) exchange rate. For those invested in the Pound the GfK Consumer Confidence Survey for December is likely to ignite volatility. In addition, Public Sector Net Borrowing data should cause Sterling changes. Over the Channel, German Consumer Confidence and German Import Prices may be of interest to those invested in the single currency.
The Euro to Pound Sterling (EUR/GBP) exchange rate reached a high of 0.7300 during Monday’s European session.
