GBP/EUR Exchange Rate Flat as German Factory Orders Fall
The Pound Euro (GBP/EUR) exchange rate is trending narrowly this morning as a surprise contraction in Germany factory orders prompts concerns that trade tensions are starting to bite in Europe.
At the time of writing the GBP/EUR exchange rate is virtually unchanged so far today, as the pairing looks to hold its head above €1.11.
Euro (EUR) Exchange Rates Subdued Following Disappointing German Data
The Euro (EUR) is struggling to find any gains against the Pound (GBP) and the majority of its other peers this morning in the wake of Germany’s latest factory order figures.
According to data published by Germany’s federal statistics agency, order volumes contracted a further 0.9% in July after previously slumping 3.9% in June and came in well below market forecasts of a rebound of 1.8% at the start of the third quarter.
The latest slide was attributed to a slump in overseas demand for goods, with Germany’s Economy Ministry placing the blame on rising global uncertainty.
This appears to be a clear sign that trade war fears are starting to be felt in Europe’s largest economy, something that likely to spook many Euro traders.
Pound (GBP) Exchange Rates Hold Following Brexit Spike
At the same time the Pound (GBP) is flat this morning as markets reflect on the latest Brexit developments.
Sterling spiked yesterday afternoon following a Bloomberg report citing unnamed sources who suggested the UK and Germany would be willing to ‘accept a less detailed agreement on the UK’s future economic and trade ties with the EU in a bid to get a Brexit deal done’.
While the Pound quickly slipped back from its best levels, the GBP/EUR exchange rate was still able to end yesterday’s session slightly higher than where it began.
With no other notable developments or UK data releases this morning it has left Sterling content to consolidate its position this morning.
GBP/EUR Exchange Rate Forecast: Eurozone GDP in Focus
Looking ahead, movement in the Pound Euro (GBP/EUR) exchange rate at the tail end of this week is likely to be largely driven by the release of the Eurozone’s latest GDP estimate.
Economists forecast Friday’s reading will confirm that the bloc expanded by a robust 0.4% in the second quarter, potentially helping to shore up the strength of the single currency.
However at same time, potentially denting the Euro tomorrow will be France’s latest industrial production figures, with analysts forecasting muted overseas demand could see factory output slow in July.
Meanwhile Halifax will publish its latest UK house price index tomorrow, with the Pound potentially being lifted by an expected rise in prices last month.