Pound Euro Exchange Rate Directionless amid Data-Light Calendar

September 17, 2024 - Written by John Cameron

STORY LINK Pound Euro Exchange Rate Directionless amid Data-Light Calendar

The Pound Euro (GBP/EUR) exchange rate treaded water on Monday amid a lack of both UK and Eurozone economic data releases.

At the time of writing, the GBP/EUR was trading at around €1.1862, virtually unchanged from Thursday’s opening levels.

The Euro (EUR) traded in mixed territory against the majority of its peers on Monday, as the absence of Eurozone data releases weighed on the single currency.

However, a weakening US Dollar (USD) managed to offer some modest support to EUR exchange rates.

With the Federal Reserve expected to adopt a more aggressive monetary policy stance this week, the USD declined against its counterparts, which in turn lifted the Euro due to the negative correlation between the two currencies.

On Monday, the Pound (GBP) strengthened against a number of currencies despite a lack of fresh economic data from the UK.

The Pound's gains were supported by market expectations of potential interest rate cuts from the Bank of England (BoE).

According to a Reuters survey last week, all 65 economists involved predicted that the BoE would maintain the UK's current interest rate in its meeting this week, buoying GBP exchange rates as a result.

Furthermore, a cautiously cheery market mood also helped boost Sterling, as it performed well against safer currencies due to its sensitivity to risk.

The primary focus for the Pound to Euro exchange rate this week will likely be the Bank of England’s (BoE) upcoming interest rate decision, scheduled for release on Thursday.

Should the BoE keep rates unchanged as widely anticipated, GBP exchange rates could strengthen towards the latter stages of the week.

Turning to the Euro, attention will likely turn to Tuesday's release of Germany’s ZEW economic sentiment index.

The latest index is expected to show further decline in September’s reading, expected to fall further from August’s unexpected slump.

If the data meets these negative forecasts, the Euro could face renewed pressure due to weakening sentiment in the Eurozone's largest economy.

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TAGS: Pound Euro Forecasts