UPDATE
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within a limited range on Wednesday morning.
Although German Economic Sentiment for September declined beyond expectations, the shared currency advanced versus its major rivals on Tuesday. The appreciation was the result of a 0.3% increase to employment in the second-quarter. Eurozone inflation data, due for publication later on Wednesday morning, has the potential to provoke single currency volatility.
After Tuesday’s British Consumer Price Index showed August’s inflation dropped to 0.0%, the Pound declined versus many of its competitors. Although the Bank of England (BoE) had already warned that the UK will be subject to a period of low inflation, the lack of price pressures is likely to see a long delay to a benchmark rate hike. British labour market data may provoke changes for the UK asset.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7338.
Yesterday…
Euro to Pound Sterling (EUR/GBP) Conversion Rate Predicted to Trend Statically on Mixed European Data
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending within a limited range on Tuesday afternoon.
Although the situation in China has seen heightened demand for safe-haven assets, the common currency is generally trending statically versus its major peers. The absence of movement is likely to be connected to trader uncertainty with regards to Euro valuation. Some European Central Bank (ECB) officials have already stated that Euro overvaluation could prompt an expansion of current monetary policy. President Mario Draghi has already extended the deadline for ending the quantitative easing scheme after negative correlation with the US Dollar caused a significant single currency appreciation.
European economic data produced a mixed-bag of results on Tuesday which contributed to the subdued Euro trade. Of particular disappointment was the German ZEW Economic Sentiment survey for September which declined beyond expectations to 12.1 from 25.0. However, the German ZEW Current Situation Survey for September bettered the median market forecast drop from 65.7 to 64.0, with the actual result reaching 67.5.
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7338.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Sterling Steady Today after UK Inflation Returns to Zero
After British economic data showed inflation met with expectations, the Pound held steady versus many of its currency rivals. An appreciation against commodity-correlated currencies can be linked to China’s equity market having ended the session 3.5% down, the second-consecutive day of declination in the Shanghai Composite Index.
On the year, August’s UK Consumer Price Index dropped to 0.0%, in line with the median market forecast. August’s Core Consumer Price Index also met with the market projection on the year having dropped from 1.2% to 1.0%. Bank of England (BoE) officials have already stated that they expect inflation to remain low until the close of the year, with oil prices holding below $50 a barrel. The lack of inflationary pressure, however, is a concern to rate hawks and the BoE will likely delay an interest rate hike until inflation moves closer to the bank’s 2.0% target.
The Euro to Pound Sterling (EUR/GBP) exchange rate dropped to a low of 0.7311 during Tuesday’s European session.
Euro to British Pound (EUR/GBP) Exchange Rate Forecast to Hold Steady ahead of UK Labour Market Data
With a complete absence of further domestic data publications to provoke changes, the Euro to Pound Sterling (EUR/GBP) exchange rate is likely to hold steady for the remainder of Tuesday’s European session. With that being said, a surprise result in US Advance Retail Sales could provoke market volatility.
Wednesday’s economic docket will see several influential data publications pertaining to both Europe and the UK. For those trading with the single currency, Eurozone inflation data will be of significance. For those invested in the British asset, labour market data reports will be of interest.
The Euro to Pound Sterling (EUR/GBP) exchange rate advanced to a high of 0.7354 during Tuesday’s European session.