ExchangeRates.org.uk - At the time of writing, GBP/EUR traded at around €1.2057, virtually unchanged from Tuesday’s opening rate.The Pound (GBP) managed to hold steady against the majority of its peers on Tuesday following the publication of some underwhelming economic data.
The UK’s latest BRC retail sales monitor came in well below forecast this month, with the index falling from a previous reading of 0.3% down to -3.4%, well behind expectations that the data would rise to 0.7%.
The country’s latest retail sales monitor, which measures retail sales in the UK on a like-for-like basis, came in at a six-month low in November, and was primarily put down to disruptions caused by storm Bert and a later ‘Black Friday’ than usual.
However, despite this underwhelming data release, GBP exchange rates managed to stay above ground on Tuesday, slightly underpinned by a risk-on market mood on the back of its status as a risk-sensitive currency.
Euro (EUR) Undermined by Absence of Data
The Euro (EUR) struggled to garner investor attention on Tuesday and traded in a wide range against the majority of its peers as a lack of data releases from within the Eurozone left the common currency without a clear directional basis.
As such, EUR exchange rates were also slightly impacted by Tuesday’s market mood, which saw investors opt for risker assets.
With the Euro being a primary safe-haven currency, Tuesday’s risk-on flows applied further pressure onto EUR exchange rates.
GBP/EUR Forecast: PMIs in the Spotlight
Looking forward, the primary driver of movement for the Pound Euro exchange rate looking ahead to Wednesday will likely be the publication of both the UK’s and the Eurozone’s finalised services PMIs.
Both indices are expected to hover around the 50 level that marks expansion, with the UK’s finalised index forecast to come in at 50.0 while the Eurozone’s index is expected to print just below, at 49.2.
Should the data print as expected, the GBP/EUR exchange rate could firm on the back of a potentially stronger UK services PMI reading.
However, should either index deviate from expectations, this could infuse fresh volatility into the GBP/EUR exchange rate during mid-week trade.
This content was originally published on ExchangeRates.org.uk