Pound Euro Exchange Rate Stable following ECB Interest Rate Decision

September 13, 2024 - Written by John Cameron

STORY LINK Pound Euro Exchange Rate Stable following ECB Interest Rate Decision

Pound Euro Exchange Subdued following ECB Rate Cut

The Pound Euro (GBP/EUR) exchange rate treaded water on Thursday following the European Central Bank’s (ECB) latest interest rate decision.

At the time of writing, the GBP/EUR was trading at around €1.1830, virtually unchanged from Thursday’s opening levels.

Euro (EUR) Ticks Up following ECB Rate Cut

The Euro (EUR) edged higher against most major currencies on Thursday, even as the European Central Bank (ECB) implemented a widely anticipated 25-basis-point interest rate cut.

Despite the rate reduction, the Euro found support following remarks from ECB President Christine Lagarde.

While Lagarde acknowledged that monetary policy would need to stay restrictive going forward, she emphasized the importance of being guided by economic data, which helped boost confidence in the Euro.

Christine Lagarde commented: ‘We will keep policy rates sufficiently restrictive for as long as necessary to achieve this aim. We are not pre-committing to a particular rate path.

Pound (GBP) Remains Steady despite Absence of Data

On Thursday, the pound (GBP) remained largely unchanged against its major counterparts, with a lack of notable UK economic data leaving Sterling to trade without a clear direction.

However, GBP did manage to claw back much of the ground lost in Wednesday’s European session, after the publication of some disappointing August GDP figures.

Furthermore, despite a generally positive market sentiment on Thursday, the Pound's usual sensitivity to risk failed to boost its performance, as the upbeat tone had little impact on GBP exchange rates.

GBP/EUR Exchange Rate Forecast: Eurozone Data to Drive Movement?

Looking ahead, the primary driver of movement for the Pound Euro exchange rate on Friday will likely be upcoming Eurozone data releases.

One key report to watch is the Eurozone's industrial production figures for July, which are expected to show a slight improvement, with the monthly figure forecast to rise from -0.3% to -0.1%.

However, as the data is still anticipated to remain in negative territory, it’s unlikely to provide much support for the Euro.

Meanwhile, with UK economic data sparse for the rest of the week, the Pound's movement will likely be shaped by broader market risk sentiment.

If the current upbeat market mood persists, the Pound could gain ground against other currencies.

On the other hand, a shift toward a more cautious market outlook could put pressure on Sterling.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts