Meanwhile, the Euro could come under further pressure with the latest ZEW economic sentiment for Germany. An expected uptick in the jobless rate and a stagnant month of GDP growth could weigh on Sterling. Looking towards next week’s session, the Pound Euro exchange rate could see further movement with the latest labour market and economic growth data for the UK. GBP/EUR Exchange Rate Forecast: UK Jobs Data Ahead Ongoing concerns of the bloc’s largest economy struggling to recover is weighing on the single currency. Against expectations of a flat reading of zero growth, Germany’s factory activity had fallen by 0.2% after a 0.3% growth in April. Against predictions of a mild 1.2% increase, orders surged by 6.4% in May.Įnd of the week, however, and German industrial production unexpectedly declined. Providing the Euro with a modest boost was the surprisingly strong recovery in German factory orders which smashed forecasts. Despite remaining in expansion territory of above 50, the uptick was modest and represented the lowest since January. The figure was revised lower to 52.0 in June compared to a preliminary 52.4, and May’s reading of 55.1. Midweek and Euro softened further with the release of weaker-than-expected service PMIs. The latest data concerned EUR investors over the state of the German economy. The overall trade surplus narrowed to the smallest level since December. Exports in Europe’s largest economy unexpectedly contracted in May as the figure slipped 0.1% against an expected 0.3% rise. But ECB policymakers confirmed their commitment in bringing inflation down, paring any further losses.įurther heaping pressure on the Euro, however, was disappointing German trade data. Meanwhile, the Euro (EUR) succumbed to increased pressure as a myriad of downbeat data offset a hawkish European Central Bank (ECB).Īlong with other sectors around the world, manufacturing PMI confirmed that Eurozone factory activity contracted at its quickest pace in three years, since June 2020, dragging the Euro lower. Euro (EUR) Exchange Rates Pressured by Downbeat Data Despite ongoing fears of a looming recession, short-term strength of elevated interest rate hike bets kept Sterling supported. However, towards the end of the week and a lack of major economic data left the Pound susceptible to market dynamics. Tim Moore, Economics Director at S&P Global, said of the latest data: ‘The service sector showed renewed signs of fragility in June as rising interest rates and concerns about the UK economic outlook took their toll on customer demand.’ A confirmed slowdown in the service sector would usually weigh on Sterling if the figure didn’t still point to a fifth consecutive month of growth. Midweek, and final services PMI painted a mixed picture, and the Pound was fairly unaffected by the printing. Also, news that food inflation had finally begun cooling also supported Sterling over hopes the cost-of-living crisis will start to ease up. With concerns of a looming recession due to the BoE’s relentless tightening, a firm lid was kept on Sterling.Ī welcome risk-on mood swept across the markets and helped the riskier currency of the Pound pick up some pace. A confirmed contraction in the manufacturing sector put Sterling under pressure as fears grew of economic strife gripped investors. The Pound (GBP) staged a strong recovery throughout the week after opening the session on the back foot. Pound (GBP) Exchange Rates Supported by Rate Hike Expectations Overall, the GBP/EUR fluctuated wildly to close the session at around the €1.1717 mark. The Pound Euro (GBP/EUR) exchange rate climbed considerably through the week as elevated interest rate hike bets from the Bank of England (BoE) were met with downbeat Eurozone data.
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