- Eurozone data offers all-around support – Retail PMIs show universal increase
- Sentix score also positive – Better-than-expected outcome recorded
- Pound Sterling crashes across the board – Movement comes after polls point to ‘Brexit’
- Eurozone GDP data impresses – But stronger-than-forecast results fail to boost the Euro
UK GDP Report Has Little Impact on GBP/EUR
The EUR/GBP exchange rate was trending in the region of 0.7832 towards the close of the European session, having gained 0.3% despite the UK’s GDP estimate showing a pickup in growth from 0.4% to 0.5%.
On Thursday German current account and UK trade balance figures are likely to have an impact on EUR/GBP trading.
(Previously updated 13:30 08/06/2015)
Pound Steady on Production Data
Although the World Bank’s negative revisions to US and global growth forecasts gave the Euro a boost on Wednesday (thank to bets the Federal Reserve will hold off raising interest rates for the time being) the Pound was able to trim previous losses against its European counterpart thanks to better-than-forecast manufacturing and industrial production figures.
With the data exceeding expectations on both a monthly and annual basis, the EUR/GBP exchange rate was left trending in the region of 0.7824
If the UK’s upcoming growth estimate also inspires confidence in the UK economy we could see the Pound pushing the common currency lower as the European session progresses.
Conversely, a concerning growth figure could counteract the positive impact of this morning’s production reports and send Sterling spiraling lower before the close of the European session.
The last NIESR estimate printed at 0.3%.
(Previously updated 08:30 08/06/2016)
Euro Edges Higher Ahead of UK Data
The Euro to Pound Sterling (EUR/GBP) exchange rate crept slightly higher on Wednesday ahead of the publication of UK industrial and manufacturing production data.
If the reports print as forecast Sterling could extend declines as the European session progresses.
Investors with an interest in the EUR/GBP exchange rate will also be focusing on the UK’s GDP data.
(Previously updated 17:30 07/06/2016)
EUR/GBP Drops 0.8% After Eurozone GDP
After surging yesterday on the back of EU Referendum polls supporting the ‘Leave’ campaign, the Euro to Pound Sterling exchange rate trimmed gains prior to the release of the Eurozone’s final first quarter growth data.
EUR/GBP was left trading in the region of 0.7829 as UK house price data exceeded forecasts.
The pairing extended losses and fell to 0.7790 as trading continued despite the Eurozone’s first quarter growth figures proving more impressive than previously forecast.
Earlier German Industrial Production data had also printed at stronger-than-forecast levels.
Tomorrow reports with the potential to inspire EUR/GBP exchange rate movement include the UK’s industrial/manufacturing production figures and the NIESR GDP estimate for May.
Industrial production is expected to print at -0.3% in the year while annual manufacturing production is expected to improve slightly from -1.9% to -1.3%.
(Previously updated 17:30 06/06/2016)
The appeal of the Euro has been high overall today, thanks to the morning’s domestic data out of the Eurozone.
The Pound, by comparison, has been in a solid state of decline, having been rocked once again by instability-inducing EU Referendum polling data. As well as slumping against the Euro (GBP/EUR) Sterling has posted notable losses against the US Dollar, Australian Dollar, New Zealand Dollar and Canadian Dollar.
GBP/EUR recently climbed as high as 1.32 on the back of easing ‘Brexit’ fears, but with sentiment now reversed the Pound has slumped to a low of 1.26 against the Euro.
Whether the Pound has further to fall remains to be seen, but with UK data thin on the ground until Wednesday, ‘Brexit’ news is likely to be the main cause of GBP/EUR exchange rate volatility.
Eurozone Economic News: PMI Results Don’t Disappoint Investors across the Eurozone
The Euro has appreciated against its rivals on the whole today, with gains coming in the region of 0.3% against the Australian Dollar (EUR/AUD), 0.4% against the Japanese Yen (EUR/JPY) and 0.5% against the Pound Sterling (EUR/GBP).
The latest source of support for the Eurozone has been retail PMIs and Sentix survey data; in the former case, May’s results for Germany, France, Italy and the Eurozone have all risen, with France and the Eurozone’s variants actually rising out of the contraction range.
As an additional boost to the single currency, June’s Sentix score of investor confidence has shown a jump from 6.2 to 9.9.
Pound Sterling Enters Nosedive after Latest Polls put ‘Leave’ as More Likely Outcome
The Pound has dropped off heavily against the Euro and all of its other peers of late, owing to the latest damage done by EU Referendum polling.
The most notable losses for the Pound have consisted of -0.5% against the Euro (GBP/EUR), -0.6% against the US Dollar (GBP/USD), -0.7% against the Mexican Peso (GBP/MXN) and -1.3% against the Israeli New Shekel (GBP/ILS).
As with the previous week, the Pound has been laid low by EU Referendum polling, which has once again appeared to indicate that respondents are far more likely to vote for a ‘Leave’ outcome than a ‘Remain’.
Poll gives Brexit campaign three percentage points lead https://t.co/2KtKUeoxUU
— The Guardian (@guardian) 5 June 2016
There was also data sourced from the Daily Telegraph, which published a poll showing that 69% of around 19,000 subscribers to the newspaper favoured an ‘Out’ vote.
In response to this latest hit to Sterling’s appeal, Hussein Sayed, Chief Market Strategist at FXTM said:
‘This was the most shocking survey released so far, and with only 18 days until the referendum the Pound is extremely sensitive to opinion polls. YouGov and TNS online polls didn’t help either, as both revealed that the ‘Leave’ campaign has picked up momentum and now leads over ‘Remain’ voters’.
Future EUR, GBP Forecast: Eurozone Finance Minister Speeches due Today, UK House Prices out Tomorrow
The remainder of the day’s notable Eurozone economic announcements will come over the course of the afternoon, with speeches due from a variety of key currency bloc officials. In order, these will be Spanish Finance Minister Luis de Guindos, Deutschebank’s Andreas Dombret, the European Central Bank’s (ECB) Benoit Coeure and Austrian Minister of Finance Hans Jorg Schelling.
From the UK, the next data to watch out for will be coming tomorrow morning, in the form of the BRC like-for-like sales for May as well as the Halifax house prices for the same month.
In the former case, an improvement from -0.9% to 0.3% is forecast, while in the latter, prices are expected to rise on the month on a seasonally adjusted basis but dip slightly for the three months on the year to the end of May.
Current EUR, GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7869 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2710 today.