Pound to Euro Exchange Rate Today: Subdued

November 20, 2024 - Written by David Woodsmith

STORY LINK Pound to Euro Exchange Rate Today: Subdued

The Pound Euro (GBP/EUR) exchange rate traded largely flat on Tuesday following the publication of the Eurozone’s latest inflationary data release.

At the time of writing, the GBP/EUR was trading at around €1.1970, virtually unchanged from Tuesday’s opening levels.

The Euro (EUR) weakened against most of its counterparts on Tuesday following the release of the Eurozone's latest consumer price index (CPI).

The final reading for October confirmed that the Eurozone's headline inflation rate climbed from 1.7% to 2%, while core inflation held steady at 2.7%.

Although signs of rising inflation in the Eurozone diminished expectations of an European Central Bank (ECB) interest rate cut, this did not provide support for the single currency after the release.

The Euro's decline was primarily attributed to a strengthening US Dollar (USD), given the inverse relationship between the two currencies.

The Pound (GBP) had a tough time capturing investor interest on Tuesday and dipped against most of its counterparts thanks to a data light trading session which saw GBP exchange rates trade without a clear direction.

However, adding to Sterling's woes on Tuesday was a sense of caution within markets.

Given its growing sensitivity to risk, Tuesday's gloomy trading environment held the Pound back even further, causing it to lose ground against its safer currency alternatives.

GBP/EUR Exchange Rate Forecast: UK Inflation Data to Drive Movement

As we look ahead to Wednesday, the key catalyst for the Pound Euro exchange rate is set to be the UK's own upcoming inflation release.

October's consumer price index is expected to reveal a rise in the country's headline inflation rate, with predictions placing it at 2.2%, up from 1.7%.

Meanwhile, the UK's core inflation figure is expected to remain unchanged at 3.2%.

If the data aligns with expectations and indicates rising UK inflation, it may diminish speculation about Bank of England (BoE) interest rate cuts, thereby bolstering the Pound.

Shifting focus to the Euro, Germany's latest Producer Price Index (PPI) release could pose new challenges for the single currency mid-week trade.

If the data confirms another consecutive decline, the Euro might face renewed pressure.

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TAGS: Pound Euro Forecasts