GBP/EUR exchange rate midweek update: pound trades in narrow range versus euro
The pound euro (GBP/EUR) exchange rate traversed the 1.18 range amid waning consumer and business confidence in Germany.
(24/06/2024 to 26/06/2024)
Monday
The pound euro (GBP/EUR) exchange rate was muted following the publication of a lackluster German business sentiment index that showed morale unexpectedly fell in June.
The pair continued to trade at around 1.181 after the Ifo institute’s index declined to 88.6 from 89.3 in May, compared with a reading of 89.7 forecast by economists.
Ifo president Clemens Fuest said: “The German economy is having difficulty overcoming stagnation,”
For the euro, signs of flagging business confidence in the Eurozone’s largest economy compounded ongoing political tensions in France, where Marine Le Pen’s far-right party leads opinion polls ahead of the election.
Tuesday
The pound euro rate remained trapped in a narrow range, firming marginally to 1.184, owing to a lack of notable data from both sides.
Deprived of data, investors were left to focus on the upcoming UK elections, the timing of the BoE’s first interest rate cut, and the first stage of France’s parliamentary election.
Wednesday
The currency pair traded sideways following the Confederation of British Industry’s (CBI) latest survey, which showed UK retail sales shifted into reverse in June. The CBI’s monthly sales balance, which measures volumes compared with a year ago, dropped to -24 in June from +8 in May.
This was negated by renewed signs of German economic pessimism. For July, the German GfK Consumer Climate Indicator unexpectedly declined from – 20.9 to -21.8, missing predictions for an increase to -18.9.
Looking ahead
The main catalysts for euro movement could be the bloc’s economic sentiment indicator on Thursday. If, as expected, economic optimism improves for June, the single currency could firm.
The latest UK GDP print for the first quarter hits the headlines on Friday, which is forecast to remain unchanged.