Pound to Euro Rate Flat despite Positive German Data

October 9, 2024 - Written by Frank Davies

STORY LINK Pound to Euro Rate Flat despite Positive German Data

The Pound Euro (GBP/EUR) exchange rate traded in a narrow range on Tuesday as Germany published its latest industrial production reading.

At the time of writing, the GBP/EUR was trading at around €1.1933, virtually unchanged from Tuesday’s opening levels.

The Euro (EUR) rose against most currencies on Tuesday, bolstered by Germany's newest industrial production numbers.

The index exceeded market forecasts in August, jumping from a previous -2.9% to a positive 2.9%, significantly beating the anticipated 0.8%.

Destatis commented:

‘Currently, production in the automotive industry fluctuates considerably from month to month and this has an impact on the monthly development of production in industry as a whole.’

This robust reading initially drove up the euro's attractiveness.

However, despite the encouraging data, the currency faced challenges in sustaining its upward momentum after the release.

The Pound (GBP) held steady against most currencies on Tuesday even with a lack of significant economic drivers.

Offering some support to Sterling on Tuesday was the release of the UK's recent grocery inflation data from market research group Kantar.

The latest figures revealed that grocery inflation increased in September, rising from a previous reading of 1.7% to 2%.

Nevertheless, the prevailing cautious market mood limited further gains for the risk-sensitive Pound, making it challenging for the currency to appreciate further.

Looking forward, the main driver of the Pound Euro exchange rate as we head into Wednesday is expected to be a series of speeches from European Central Bank (ECB) officials.

Should the ECB adopt a dovish stance, the Euro may weaken due to increased expectations of interest rate reductions. Conversely, if ECB members hint at a delay in rate cuts, the Euro could strengthen by the week's end.

As for the Pound, the lack of significant UK data for most of the week may lead to Sterling trading without a clear trajectory, largely swayed by broader market sentiment.

If market sentiment shifts towards a more positive outlook, Sterling could still see an uptick in sentiment by the week's close.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound Euro Forecasts