Upcoming Bank of England Data Reports See Pound (GBP) Ready to Move Today, GBP/EUR Exchange Rate Braced for Hawkish Result
The GBP/EUR exchange rate has seen a fair degree of volatility in preparation for today’s bumper Bank of England (BoE) data release. With the Rate Decision, Inflation Report and Monetary Policy Committee (MPC) meeting minutes all due for publication the pairing is sure to see some elevated movement in the coming hours, although the direction is highly dependent upon whether the MPC sentiment towards an interest rate rise emerges as either hawkish or dovish.
Currently, however, the GBP/EUR pairing is narrowly trending around 1.4324.
Earlier…
Services PMIs for the Eurozone and UK push the GBP/EUR exchange rate higher today in spite of Germany and Spain showing service sector growth.
UK Construction PMI Shortfall Offset by Royal Bank of Scotland (RBS) Share Sale, Sterling (GBP) Holds Gains Today
Contraction was evident in the UK’s Construction PMI yesterday as the figure came in at 57.1 rather than the anticipated 58.3. Although this does indicate that the sector is still experiencing growth, remaining above the neutral index baseline of 50, it also shows that it is undeniably beginning to slow once more in spite of the gains of previous months. This saw the GBP/EUR exchange rate abruptly decrease to a low 1.4202, although the pairing would go on to recover this in the afternoon.
The imminent sale of Royal Bank of Scotland (RBS) shares prompted increased interest in the Pound (GBP) as pundits also returned to the currency in advance of a potentially positive Services PMI result.
Eurozone PMIs End on Overall High but Decline in Retail Sales Pushes Euro Down to Bolster GBP/EUR Exchange Rate
In spite of declines in the Greek and Italian service sectors, the Eurozone’s overall Services and Composite PMIs both posted positively this morning, held up by strong showings from a robust Germany and expanding Spain. In response the GBP/EUR exchange rate slumped slightly to 1.4336.
Falling short of the forecast figure to show a decrease in growth on the previous month, the UK Services PMI has nevertheless been hailed as a relatively positive result. Unlike the manufacturing sector, services are regarded to be holding up in the wake of economic uncertainty and boosting the overall composite to keep the nation in a state of relative growth. This more optimistic view prevented the GBP/EUR pairing from falling further and, in tandem with bad Eurozone Retail Sales, inspired a further upwards trend that saw the exchange rate rising to a new daily high of 1.4357.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Further Gains Projected Should Thursday’s Bank of England (BoE) Reports Prove Hawkish
German Industrial Production figures are due for publication on Friday, as are those for France. Given the apparently healthy state of Germany’s economy at present this stands to produce a relatively strong result which could prompt another increase in value for the common currency before the weekend.
By far the bigger influence on the pairing in the latter half of the week, however, will be the raft of data from the Bank of England (BoE) due for release on Thursday. The Interest Rate Decision and Inflation Report stand to significantly alter the outlook for Sterling, with any signals of potential for a hike the strongest motivator of investors.
Current GBP, EUR Exchange Rates
At time of writing the GBP/EUR exchange rate is moving up around the 1.4348 mark, while the EUR/GBP pairing is trending down at 0.6968.
