UPDATE
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced by around 0.4% on Friday morning.
After Bank of England (BoE) policymaker Ben Broadbent stated that he believes it appropriate to delay rate hikes even without the threat of China’s economic slowdown, the Pound softened versus its major peers. However, these comments seem at odds with a recent speech from Governor Mark Carney so the depreciation has settled somewhat. With a complete absence of domestic data, however, the Pound is likely to see subdued demand during Friday’s European session.
With mounting uncertainty regarding the full extent of the impact of the Volkswagen scandal, sentiment towards the common currency cooled. Germany is reliant upon its automotive industry, and the prospect that more car companies have been involved in similar illegalities is cause for concern for Euro investors. If sentiment in Germany fades considerably it will have an adverse affect on the Eurozone economy as a whole.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3670.
Yesterday…
GBP/EUR Conversion Rate Predicted to Soften after UK Mortgages Data Missed Estimates
The Pound Sterling to Euro (GBP/EUR) exchange rate declined by around -0.6% on Thursday afternoon.
Despite the fact that the solitary British data publication failed to meet with median market projections, the Pound edged higher versus many of its currency rivals. The appreciation can be linked to concerns that Wednesday’s downtrend was overdone. August’s BBA Loans for House Purchase was predicted to advance from 46315 to 47000, but the actual result only reached 46743. Despite the fact that the data didn’t advance in line with expectations, it shows that banks approved the highest number of mortgages since February 2014.
‘People are putting their money into bricks and mortar while interest rates are low and the timing of a likely rate rise remains uncertain,’ BBA chief economist Richard Woolhouse said.
With an absence of British economic data for the remainder of the week’s trade, Sterling movement will be subject to changes in market sentiment. Any comments from Bank of England (BoE) officials or respected economists regarding the future of monetary policy will also likely provoke changes for the British asset.
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.3551.
EUR/GBP Exchange Rate Forecast to Trend Statically after German Consumer Confidence Declines
German economic data produced a mixed-bag of data results today which has caused the Euro to hold steady versus most of its major peers. A slight appreciation can be attributed to positive sentiment towards the European Central Bank (ECB). ECB President Mario Draghi stated yesterday that the central bank would like to assess the impact of the current quantitative easing scheme before expanding monetary policy stimulus.
Perhaps the most disappointing German data result was October’s Consumer Confidence Survey. German Consumer Confidence was forecast to drop fractionally from 9.9 to 9.8, but the actual result fell to 9.6. The drop in confidence has been attributed to the ongoing refugee crisis. ‘Consumer optimism is waning somewhat,’ market research company GfK said in a statement. ‘If we look at the very positive development in the retail sector, we can assume that consumer spending will continue to be a very important pillar for the economy this year. To what extent the sharp influx of refugees will have an effect on domestic demand remains to be seen,’ GfK continued.
The Pound Sterling to Euro (GBP/EUR) exchange rate dropped to a low of 1.3483 during Thursday’s European session.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast to Trend Statically ahead of US Durable Goods Orders
Given the complete absence of further British and European Data publications to provoke changes, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to continue holding steady for the remainder of Thursday’s European session. With that being said, however, there is the possibility of volatility depending on the result from US Durable Goods Orders. If the result is poor it will give the Federal Open Market Committee (FOMC) scope to hold the cash rate for longer. This could weigh on demand for the British asset given that most economists agree that the BoE will delay a rate hike until after the Fed liftoff.
The Pound Sterling to Euro (GBP/EUR) exchange rate climbed to a high of 1.3657 during Thursday’s European session.