Home » Pound euro exchange rate wavers on mixed EUR data

Pound euro exchange rate wavers on mixed EUR data

The pound euro exchange rate was trapped in narrow range this week as the only trading impetus came from some mid-tier Eurozone data. 

Euro undermined by uneven data 

The pound euro exchange rate opened this week on the front foot. Sterling was buoyed by data suggesting that UK retail sales volumes rebounded for the first time in 11 months. While the euro benefitted from its negative correlation with the US dollar. 

GBP/EUR continued to trade sideways on Tuesday following the publication of Germany’s latest consumer confidence index. 

While consumer sentiment going into April was a little more optimistic than expected, the euro struggled to advance against the pound, following hawkish comments from Bank of England policymaker Catherine Mann. 

The euro then faced headwinds in the middle of the week as the single currency’s negative correlation with the US dollar became a liability as USD exchange rates firmed, offsetting any potential gains stemming from an improvement in Eurozone economic sentiment this month. 

GBP/EUR then crept higher at the end in the second half of the week, following a surprise slump in Germany’s latest retail sales figures. 

However, these gains remained very modest in scope as the pound was simultaneously undermined after the UK’s latest GDP figures confirmed the country slipped into a recession in the second half of 2023. 

Cooling Eurozone inflation to pull the euro lower? 

Turning to next week, it’s likely that the Eurozone’s latest consumer price index will act as the main catalyst of movement for the pound euro exchange rate. 

March’s preliminary CPI figures could pull the euro lower as they are expected to report another cooling of inflation, which may encourage the European Central Bank (ECB) to pursue an April interest rate cut. 

Also of note to EUR investors will be Germany’s latest factory orders release. Order growth is forecast to have rebounded sharply in February. Will this help to reverse any inflation-driven losses at the end of the week? 

Meanwhile, the publication of the UK’s services PMI will likely be the primary focus for GBP investors next week. 

March’s finalised figures could drag on the pound as they are expected to confirm activity in the service sector slowed to a three-month low. 

If you’ve got a GBP/EUR currency transfer to arrange, the team at TorFX are on hand to help. Get started now to access bank-beating exchange rates and fast, free transfers.  

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