GBP/EUR Rangebound despite Downbeat German Data

September 26, 2024 - Written by John Cameron

STORY LINK GBP/EUR Rangebound despite Downbeat German Data

The Pound Euro (GBP/EUR) exchange rate treaded water on Tuesday following the publication of Germany’s IFO business climate index.

At the time of writing, the GBP/EUR was trading at around €1.2021, virtually unchanged from Tuesday’s opening levels.

The Euro (EUR) remained steady against most of its peers on Tuesday, despite the release of disappointing economic data from the Eurozone.

Germany’s latest IFO business climate index, published Tuesday morning, significantly missed expectations, dropping from 86.6 to 85.4, below the forecast of 86.

This marked the lowest reading since January and underscored persistent concerns about the bloc’s economic outlook.

An exert from the Ifo Institute index read: ‘The German economy is coming under ever-increasing pressure.’

However, despite this lackluster data from the Eurozone’s largest economy, the single currency managed to maintain its position against the majority of its competitors following the release.

The pound (GBP) faced challenges garnering investor attention on Tuesday as a lack of UK economic data left Sterling without a clear direction.

Adding pressure to GBP exchange rates on Tuesday were remarks from Bank of England (BoE) Governor Andrew Bailey.

In an interview released earlier in the day, and just a week after the BoE's decision to hold interest rates, Bailey cautioned that UK interest rates are ‘gradually heading downwards’.

With no additional economic drivers, this kept market sentiment towards Sterling subdued as Tuesday's European trading session unfolded.

GBP/EUR Exchange Rate Forecast: Eurozone Data in the Spotlight

Looking ahead, the main driver of movement for the Pound to Euro exchange rate on Thursday is likely to be upcoming economic data from Germany.

The Euro may strengthen against its peers if Germany's latest GFK consumer confidence index prints as expected and shows a slight improvement for October.

However, with no significant data releases from the UK or Eurozone on Wednesday, the GBP/EUR currency pairing could experience a period of limited movement and trade without a clear direction.

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TAGS: Pound Euro Forecasts