Pound to Euro Exchange Rate News: GBP/EUR Climbs Amid Weak Eurozone Data

September 24, 2024 - Written by John Cameron

STORY LINK Pound to Euro Exchange Rate News: GBP/EUR Climbs Amid Weak Eurozone Data

The Pound to Euro (GBP/EUR) exchange rate started the week on a high, surging to levels not seen since April 2022.

Athe time of writing, GBP/EUR is trading at approximately €1.1961, marking a 0.3% rise from Monday’s opening levels.

The Euro (EUR) faced strong headwinds on Monday following the release of concerning Eurozone PMI figures.

Preliminary data for September revealed that the bloc's private sector saw its first contraction in seven months, with both the manufacturing and services sectors falling short of expectations.

Germany’s persistent economic woes were a key driver behind the decline, as Monday’s German PMIs from reinforce expectations the Eurozone’s largest economy is in a recession.

Analysts point to the worst downturn in Germany’s manufacturing sector in a year as a significant factor.

These developments are fuelling speculation that the European Central Bank (ECB) could be considering another rate cut when it convenes in October.

Despite making gains against the Euro, the Pound (GBP) had a more challenging time against other major currencies on Monday due to softer-than-expected UK PMI data.

S&P Global’s latest report indicated that the UK’s private sector growth slowed in September, with the service sector in particular seeing a larger-than-anticipated decline.

This slowdown has been partly attributed to uncertainty surrounding the upcoming October budget, which has weighed on consumer spending.

Additionally, the data suggested that inflationary pressures are easing, which could prompt the Bank of England (BoE) to consider cutting interest rates again, when it next meets in November.

Looking ahead, the Pound to Euro exchange rate could continue to strengthen on Tuesday with the release of Germany’s IFO business climate index.

September’s index is expected to show a further decline in business sentiment, marking the fifth consecutive month of deterioration and potentially reinforcing concerns that Germany is slipping deeper into recession.

Meanwhile, GBP investors will be closely watching Prime Minister Keir Starmer’s address at the Labour party conference, hoping for a more positive economic outlook amidst the continued challenges facing the UK.

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TAGS: Pound Euro Forecasts