ExchangeRates.org.uk – The Pound Euro () exchange rate fluctuated last week, as central banker comments and wider market trends infused the pairing with volatility.Latest — Exchange Rates:
Pound to Euro (GBP/EUR): 1.15479
Pound to Dollar (GBP/USD): 1.36844
Euro to Dollar (): 1.18501
DAILY RECAP:
The Pound (GBP) struggled to find a clear direction last week as a lack of impactful UK data throughout the session left Sterling rudderless.As a result, GBP/EUR wavered on Monday and stumbled on Tuesday, before bouncing back on Wednesday, with this movement primarily driven by the value of the common currency.
UK-China talks resulting in new deals between the two countries failed to lift Sterling on Thursday, with analysts pointing out that the agreements are unlikely to have a significant impact on British growth.
With UK data still absent from the calendar by the end of the week, Sterling remained uncertain.
Meanwhile, the Euro (EUR) was mixed on Monday as the currency’s strong inverse correlation with the falling US Dollar (USD) was offset by a weaker-than-forecast German business climate index.
The common currency managed to firm on Tuesday amid ongoing USD weakness, but fell on Wednesday following some dovish European Central Bank (ECB) remarks.
ECB policymaker Martin Kocher said that if EUR continues to climb against USD, having hit a four-and-a-half-year high that week, then this could dampen inflation and open the door to further interest rate cuts.
The Euro managed to recoup some losses in the latter part of the week as Eurozone data beat forecasts.
The latest economic sentiment index hit a three-year high on Thursday, while GDP growth in the third quarter printed at 0.3%, versus expectations of 0.2%.
Near-Term GBP/EUR Forecast: ECB and BoE Decisions in Focus
Looking forward, both the ECB and the Bank of England (BoE) will announce their latest monetary policy decisions on Thursday, with neither bank expected to adjust interest rates.
As a result, investors will be particularly sensitive to any hints about each bank’s policy path moving forward.
If the ECB echoes Kocher’s comments about the possibility of more rate cuts in the future, if EUR/USD extends its upside and this dampens inflation, then the Euro could face some pressure.
Meanwhile, if the BoE sounds cautious about the pace of future cuts, with UK inflation still running well above the bank’s 2% target, Sterling could edge higher against the common currency.
This content was originally published on ExchangeRates.org.uk
