GBP/EUR Exchange Rate Rangebound Eurozone Consumer Sentiment Continues to Dip
The Pound Euro (GBP/EUR) exchange rate is steady today and is currently trading around €1.115.
The Euro (EUR) steadied against the Pound (GBP) following the publication of the German GfK Consumer Confidence Survey figures for July, which fell to a worse-than-expected 9.8.
Growth from Knowledge (GfK) said in their statement:
‘The number of voices speaking of an end to the employment boom is multiplying, and in consequence many workers’ fear of losing their jobs has grown. The coming months will show whether this fall is a one-off outlier or the beginning of a change in course for the indicator.’
This follows this week’s easing of both French and German business confidence figures for June, which left many single currency traders feeling increasing jittery.
Today saw the release of the UK BBA mortgage approvals figures for May, which eased against June’s 42.898K to 42.384K.
On a non-seasonally adjusted basis, however, these were their highest since June 2016.
John Goodall, a CEO at Landbay, remained downbeat, however, saying:
‘It was another slow month for mortgage lending, with a potent cocktail of poor consumer confidence and subdued house prices.’
GBP/EUR Exchange Rate Flat as Traders Brace for BoE Chief Speech
Sterling has remained subdued against many of its competitors today, with the ongoing Tory leadership race remaining in focus.
Pound traders are awaiting the speech by Mark Carney, the Governor of the Bank of England.
Any dovish comments about the UK economy could see the GBP/EUR exchange rate begin to sink.
These will be followed by the Treasury Committee’s inflation report hearings.
Boris Johnson, the former Mayor of London and leadership favourite, has raised increasing concerns over a possible no-deal Brexit.
He said yesterday that the UK would leave the EU on 31 October ‘do or die’.
Foreign Secretary Jeremy Hunt has called into doubt Mr Johnson’s stance on Brexit, saying there can be ‘no trust’ in his judgements regarding the UK’s future with the EU.
Mr Hunt said:
‘Who is the person that we trust to send to Brussels on behalf of the British people and come back with a deal, and that has to be someone that they trust, that they’re prepared to talk to, because in the end you don’t do a deal with someone you don’t trust.’
GBP/EUR Outlook: Sterling Could Ease on Tory Leadership Hard-Brexit Comments
Euro traders will be looking ahead to tomorrow’s publication of the flash yearly German Harmonized Index of Consumer Prices for June, which are expected to hold steady at 1.3%.
Tomorrow will also see printing of the Eurozone’s business climate figures for June.
Any further easing in business or consumer sentiment – following this week’s easing in both major economies, France and Germany – could prove a drag on the EUR/GBP exchange rate.
The Pound Euro (GBP/EUR) exchange rate will most likely be driven by Tory leadership developments, however.
Sterling will remain sensitive to any comments from either leadership candidate on the issue of a hard-Brexit, with any signs of a no-deal leaving many traders feeling increasingly jittery on heightened uncertainty.
