GBP to EUR Exchange Rate Flat amid Lack of Impactful Data - Pound Euro Today

October 3, 2024 - Written by John Cameron

STORY LINK GBP to EUR Exchange Rate Flat amid Lack of Impactful Data - Pound Euro Today

The Pound to Euro (GBP/EUR) exchange rate remained relatively stable on Tuesday, with the currency pair fluctuating within a tight range. This was due to the absence of significant data and a mix of other influencing factors.

At the time of writing, GBP/EUR was trading around €1.2002, virtually unchanged from its opening level.

The British Pound (GBP) was subdued on Wednesday, with a dearth of domestic economic data leaving Sterling directionless.

Amid this uncertainty, the increasingly risk-sensitive currency also encountered some pressure due to a risk-averse mood in markets.

Investor anxiety was heightened by the intensifying conflict in the Middle East, following Iran's missile strike on Israel. This restrained GBP's movement.

Euro (EUR) Muted by ECB Expectations

The Euro (EUR) likewise saw little movement on Wednesday, following the release of the Eurozone's consumer price index the previous day.

The CPI data revealed that inflation slowed more than anticipated in September, falling below the European Central Bank's (ECB) 2% target and reinforcing expectations of another interest rate cut later in the month.

This development weighed on the Euro as Wednesday's trading began, keeping the currency's performance sluggish.

However, EUR was cushioned by positive Eurozone jobs data, as the bloc’s unemployment rate held at a record low of 6.4% in August.

GBP/EUR Exchange Rate Forecast: PMIs to Boost the Pound?

Looking ahead, Thursday's finalised services PMI data for both the Eurozone and the UK could spark movement in the GBP/EUR exchange rate.

The preliminary PMI figures for both regions fell short of expectations, indicating slowdowns in activity. Notably, the Eurozone saw a more pronounced deceleration, almost grinding to a halt in September.

If the final PMI results align with the preliminary forecasts, both GBP and EUR could face pressure, though the Pound might hold up better than the Euro.

Additionally, the Eurozone's latest producer price index could amplify the Euro's weakness against the Pound. Producer price growth is anticipated to have slowed from 0.8% in July to 0.3% in August, signalling waning inflationary pressures. This could bolster expectations of an ECB rate cut and weigh on EUR.

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TAGS: Pound Euro Forecasts