The Pound Euro (GBP/EUR) exchange rate wavered on Wednesday as markets awaited trilateral talks on the future of Greenland, leaving the pairing struggling to find a clear direction.
Pound to Euro (GBP/EUR): 1.15335 (+0.01%)
Pound to Dollar (GBP/USD): 1.34401 (+0.1%)
Euro to Dollar (EUR/USD): 1.16531 (+0.09%)
DAILY RECAP:
The Euro (EUR) moved without a clear trajectory on Wednesday as EUR investors waited for any fresh signals on the future of Greenland.
Amid escalating concerns about President Donald Trump’s interest in the Arctic territory, Greenlandic and Danish officials headed to the White House on Wednesday to discuss the situation.
EUR investors have been particularly worried by the souring of US-European relations, and the risk that Trump could use economic or even military pressure to take control of Greenland.
As a result, the Euro was subdued ahead of the high-stakes meeting, with traders reluctant to place aggressive bets.
Meanwhile, the Pound (GBP) also lacked conviction on Wednesday amid an ongoing lack of UK economic data.
One factor that lent Sterling modest support was an improvement in market risk appetite, which reflected positively on the increasingly risk-sensitive Pound against its safer peers.
GBP investors also shrugged off dovish comments from Bank of England policymaker Alan Taylor. As one of the most dovish members of the Monetary Policy Committee, his openness to further interest rate cuts came as little surprise to markets and failed to materially impact Sterling.
Near-Term GBP/EUR Forecast: UK GDP in the Spotlight
Looking ahead, EUR investors may remain focused on developments surrounding Greenland through Thursday’s session. Any signs of easing tensions could lift the Euro, while further hawkish rhetoric from the Trump administration may renew pressure on the single currency.
For the Pound, attention finally turns to the UK’s latest GDP figures. Markets expect the economy to have grown by 0.1% in November. While modest, this would mark the first positive monthly reading since June and could provide some support for Sterling.
However, a downside surprise, potentially linked to uncertainty surrounding the autumn budget, could see the Pound give up recent gains.
