Pound Euro (GBP/EUR) Exchange Rate Subdued despite Underwhelming Mid-Tier UK Data

December 4, 2024 - Written by John Cameron

STORY LINK Pound Euro (GBP/EUR) Exchange Rate Subdued despite Underwhelming Mid-Tier UK Data

The Pound Euro (GBP/EUR) exchange rate treaded water on Tuesday following the publication of some mid-tier UK data, in the form of the latest BRC retail sales monitor.

The Pound (GBP) maintained its ground against most of its counter currencies on Tuesday, despite a lacklustre economic data release.

The UK's most recent BRC retail sales monitor significantly missed its target, with the index dropping from 0.3% to -3.4%, contrary to predictions of a 0.7% increase.

The latest retail sales monitor, which tracks UK retail sales on a like-for-like basis, hit a six-month low in November.

This was largely attributed to disruptions from storm Bert and a delayed 'Black Friday'.

Nevertheless, Sterling managed to keep afloat on Tuesday, bolstered by a risk-on market sentiment given its status as a risk-sensitive currency.

The Euro (EUR) had a sluggish Tuesday and traded in a broad range against most of its counterparts as the currency lacked clear direction due to a dearth of economic data releases from the Eurozone.

Subsequently, EUR exchange rates were influenced by the market's risk-on sentiment, as investors favored riskier assets.

Being a prominent safe-haven currency, the Euro faced additional pressure from Tuesday's risk-on environment.

GBP/EUR Exchange Rate Forecast: PMIs to Drive Movement

Moving ahead, the key catalyst for the Pound Euro exchange rate as we approach Wednesday is anticipated to be the release of the final services PMI figures for both the UK and the Eurozone.

Both indices are predicted to hover around the 50 mark, which indicates expansion, with the UK's final index expected to reach 50.0 and the Eurozone's index projected to come in slightly lower, at 49.2.

If the data aligns with these expectations, the GBP/EUR exchange rate could strengthen, buoyed by a potentially stronger UK services reading.

However, any change from these forecasts could introduce new volatility into the GBP/EUR exchange rate.

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TAGS: Pound Euro Forecasts