At the time of writing, in between some temporary support for GBP/EUR, the interbank exchange rate for pound to euro has struggled this week thus far. Investors remain hesitant to purchase sterling due to the rising uncertainty of the December elections. On the other hand, as per euro forecasts, the currency has shown a lack of drive due to the economic slowdown and probability of a recovery are quite difficult to predict for now.
During last week, some modest gains were observed in GBP/EUR, since the pair started the week at 1.1576, and then closed at 1.1585. However, this week’s opening for GBPEUR has been narrower. The GBPEUR interbank exchange rate has been on a downward trend, but it is still a little below the week’s opening levels for now.
Sterling exchange rates volatile
The pound has received little support since last week, however, it is predicted that it would avoid any more losses at this point in time. As is the case, the markets are uncertain about condition in Britain. With the upcoming elections in December, it would decide how the Brexit process takes place. The demand for pound has slackened for now. On the other hand, the investors are not much interested to sell the pound either.
Sterling is expected to maintain its recovered status in hopes that general election and Brexit day has allayed any possibility of a no-deal Brexit.
Forecast for GBP/EUR exchange rate – Some expected movement
Given that the UK markets are laser-focused on the upcoming December elections, the impact of data releases is likely to be muted this week. Also, November policy of Bank of England on Thursday may not have a marked effect.
BoE is using the ‘wait and watch’ approach with respect to monetary policy, with Brexit and December elections in tow. Only if the monetary policy of the bank is out of the extraordinary, it is unlikely to cause a ripple in currency movement.
Due to this reason, any euro forecasts and much-awaited Eurozone data is more likely to cause movement in GBPEUR movement in the sessions to come shortly.
The composite Purchasing Manager’s Index (PMI) stats and Eurozone services are slated for publication on Wednesday and same goes for Eurozone retail sales outcomes. If these thrash euro forecasts, then euro support could bolster considerably. Moreover, those selling pounds for euros will be paying close attention to the German production numbers and factory orders. This will give a better idea of Germany’s economic standing.
For more information on how these factors are likely to impact the GBP/EUR interbank exchange rate in the coming weeks, you can contact me directly, Joseph Wright, on jxw@currencies.co.uk. I will endeavour to get back to you as soon as I can.
