GBP/EUR Exchange Rate Outlook: Pound Muted despite Underwhelming Eurozone Data

December 6, 2024 - Written by John Cameron

STORY LINK GBP/EUR Exchange Rate Outlook: Pound Muted despite Underwhelming Eurozone Data

The Pound Euro (GBP/EUR) exchange rate traded mostly sideways on Thursday following the release of the Eurozone’s latest retail sales data.

On Thursday, the Euro (EUR) gained strength against several other currencies but remained subdued against the Pound (GBP) despite the release of some underwhelming domestic data.

The Eurozone's retail sales index for October dropped from 0.5% to -0.5%, falling short of the anticipated -0.3% decline.

This marked the first contraction in the retail sector in three months, however, the Euro still managed to rise.

One factor contributing to the common currency’s ascent was a weakening US Dollar (USD), given the inverse relationship between the two currencies.

The Pound (GBP) held its ground against most other currencies on Thursday, even without any major domestic data releases.

Despite the lack of economic releases, GBP remained stable, supported by an overall positive trading atmosphere.

Given its growing sensitivity to market sentiment, the optimistic mood on Thursday helped maintain a steady GBP throughout the data-light trading session.

GBP/EUR Exchange Rate Forecast: Eurozone GDP to Drive Movement

Looking ahead to Friday, the primary factor influencing the Pound Euro exchange rate will be the release of the Eurozone’s latest GDP estimate for the third quarter of the year.

This economic indicator is closely watched by traders and investors, as it provides a comprehensive overview of the region's economic health.

If the data aligns with expectations and shows a growth in GDP from 0.2% to 0.4%, it could provide a significant boost to Euro exchange rates, potentially ending the week on a strong note.

Turning to the UK, the Pound will face a different scenario amid a continued lack of domestic data releases.

Without any clear domestic indicators, the Pound may trade in a more volatile or directionless manner, influenced more by broader market sentiment and external factors.

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TAGS: Pound Euro Forecasts