The Euro has ticked down against the Pound today, posting an exchange rate of 0.8925. This slip has come from falling confidence in France.
- EUR GBP rate slides to 0.8929 – GBP EUR trades up at 1.1198
- Surprise French confidence dip weakens EUR – First drop since February recorded
- Pound unmoved by GDP data – Unimpressive results point to mediocre 2017 growth
- Euro could decline on lower Eurozone confidence – Pound weakness possible on GfK figure
The recent EUR GBP dip has left the Euro in a historically strong position against the Pound, close to the best exchange rate since November 2016.
EUR Drops as French Confidence Disappoints
The Euro’s latest slip against the Pound has been triggered by July’s French consumer confidence result.
Forecasts had been for no index change at 108 points, but the reality showed a drop to 104.
The 108 figure had been the highest level since 2007, so this unexpected dip has thrown Euro traders for a loop.
Pound Traders Unfazed by Estimated Decline in Annual GDP
The Pound has remained at a rate of 1.1196 against the Euro today, despite high-impact Q2 GDP data coming out.
The preliminary results matched with forecasts, showing a slight quarterly rise from 0.2% to 0.3% and an annual slowdown from 2% to 1.7%.
This failed to trigger much Pound movement, given that it conformed with forecasts and painted a ‘slow but steady’ picture of the UK economy.
Providing a somewhat gloomy forecast on the news was PricewaterhouseCoopers Chief Economist John Hawksworth;
‘Overall, we expect this modest growth to continue at a similar rate in the second half of the year, giving annual average GDP growth of around 1.5% in 2017.
This will probably see the UK lag behind both the US and the Eurozone this year as the effects of Brexit-related uncertainty and higher inflation dampen growth here. But we do not expect this slowdown to turn into a recession’.
Making the data especially lacklustre was the calculation that on a per-capita basis, UK GDP only increased by 0.1% in Q2.
Euro to Pound Forecast: EUR Slump Possible on Confidence Stats and German Inflation
The week’s remaining Eurozone data could trigger Euro depreciation, given that forecasts have been negative for a number of high-impact announcements.
Thursday’s German GfK consumer confidence figure is forecast to show no real change, as is Friday’s French GDP result. Although Spanish GDP stats have been projected to rise, the rest of Friday’s ecostats are less optimistically estimated.
Eurozone confidence measures are predicted to decline overall in July, from consumer confidence to business confidence, as well as industrial and economic sentiment scores.
Closing Friday’s news will be initial German inflation rate stats. In another potential blow to the German economy, a dip from 1.6% to 1.5% is expected.
The last UK data of the week will be Friday’s GfK consumer confidence measure. A worsening from -10 index points to -11 has been projected. Such a result may weaken the Pound, although a GBP EUR rise could still take place if the Euro is weaker.
Current Interbank EUR GBP Exchange Rates
At the time of writing, the Euro to Pound (EUR GBP) exchange rate was trading at 0.8929 and the Pound to Euro (GBP EUR) exchange rate was trading at 1.1198.