Pound Euro Exchange Rate Flat following German CPI

October 1, 2024 - Written by John Cameron

STORY LINK Pound Euro Exchange Rate Flat following German CPI

The Pound Euro (GBP/EUR) exchange traded sideways on Monday following the publication of Germany’s latest consumer price index (CPI).

At the time of writing, the GBP/EUR was trading at around €1.1966, virtually unchanged from Thursday’s opening levels.

Euro (EUR) Unchanged following German Inflation

The Euro (EUR) managed to stay afloat against the majority of its peers on Monday following the publication of the Eurozone’s largest economy’s latest inflation print.

The latest CPI data confirmed that inflation in Germany came in at 1.6% this month, below an expected 1.9% forecast, and fell further below the European Central Banks (ECB) 2% target.

However, the data released failed to undermine the single currency in the wake of the release, as the Euro was seemingly supported by a deteriorating US Dollar (USD) thanks to the currency pairing’s negative correlation.

Pound (GBP) Remains Steady despite Downbeat GDP Print

The Pound (GBP) held its ground against most of its counterparts on Monday, even as the Office for National Statistics (ONS) released lower-than-expected GDP figures for Q2 2024.

The ONS reported that growth from April to June was revised downwards to 0.5%, a decrease from the initial 0.6% estimate.

Although the GDP reading was cooler than anticipated, it still signaled modest growth and a steady recovery from the UK's brief recession at the tail end of last year.

Consequently, GBP exchange rates remained largely unaffected by the news.

GBP/EUR Exchange Rate Forecast: Eurozone Inflation to Dent EUR?

Looking ahead to Tuesday, the main driver for the Pound Euro exchange rate is expected to be the release of the Eurozone’s consumer price index (CPI).

Septembers CPI reading is predicted to show headline inflation cooled to 1.9%, just below the European Central Bank’s target, which could further fuel speculation of ECB rate cuts and weigh on the Euro.

For the Pound, attention will turn to the UK’s Manufacturing PMI for August.

Although economists forecast a slight decline, the index is expected to stay above the key 50 mark, signaling ongoing expansion in the manufacturing sector, and could marginally underpin the British currency on Tuesday.

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TAGS: Pound Euro Forecasts