ExchangeRates.org.uk - At the time of writing, GBP/EUR was trading at €1.1985, up 0.2% on the day. The Euro (EUR) faced some modest pressure on Thursday, as the ECB published its latest Economic Bulletin. September’s monthly update on the economic and monetary conditions of the Eurozone highlighted that growth and economic activity in the bloc are weaker than the ECB projected back in June, with the central bank saying that the risk to growth remains titled to the downside. In addition, the bulletin said that inflation and wage growth are set to moderate, setting the stage for further interest rate cuts. Although none of this information was new, it seemed to remind investors of the ECB’s dovish stance relative to the BoE.
Pound (GBP) Supported by Risk-On Mood
Meanwhile, the increasingly risk-sensitive Pound (GBP) was enjoying some support on Thursday amid a recovery in risk appetite. Hopes that Israel and Hezbollah will agree to a ceasefire in Lebanon restored some calm to markets, after the recent intensification of Israeli airstrikes raised fears of an all-out war in the region. However, a drop in UK consumer confidence, as reported by the British Retail Consortium, served to limit GBP’s upside potential.
GBP/EUR Exchange Rate Forecast: Gloomy Data to See the Pairing Waver?
Looking ahead, fresh economic data on Friday could drive movement in the Pound Euro pairing, with Eurozone data potentially taking centre stage. The bloc’s latest economic sentiment reading is due out, with forecasters expecting to see a modest decline in investor morale. This may have a limited impact on EUR, although a surprise reading could cause more notable movement. Perhaps more impactful may be Germany’s latest unemployment data. With the number of unemployed people expected to edge up in the Eurozone’s largest economy, concerns that Germany may be in recession could weigh on the common currency. The only UK data due out is the Confederation of British Industry’s (CBI) distributive trades survey. Another downbeat reading could dent Sterling.
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