ExchangeRates.org.uk - At the time of writing, GBP/EUR traded at around €1.2041, virtually unchanged from Tuesday’s opening rate.The Euro (EUR) struggled to gain significant ground against the majority of its peers on Tuesday despite the publication of the Eurozone’s latest inflation data.
The bloc’s headline inflation rate ticked up in line with market expectations in December, rising from 2.2% to 2.4%, while core inflation also printed in line with forecasts, remaining at 2.7%
Furthermore, the Eurozone’s latest unemployment rate was also released on Tuesday, which remained at an all time low of 6.3% in November of last year.
Despite the upbeat data releases, specifically the Eurozone’s latest inflation reading which dampened European Central Bank (ECB) interest rate cut bets, the single currency struggled to make substantial gains in the aftermath of the publications, hobbled by an upbeat market mood which undermined the safe-haven currency.
On Tuesday, the Pound (GBP) experienced a broad trading range against most of its peers amid a generally positive market sentiment.
As a currency that is somewhat sensitive to risk, the Pound strengthened against some of its safe-haven competitors, like the US Dollar (USD), during the optimistic trading day.
However, since Sterling is not highly risk-sensitive, it still weakened against many of its risk-sensitive counterparts, such as the New Zealand Dollar (NZD) and Australian Dollar (AUD).
GBP/EUR Forecast: Eurozone Data to Continue to Drive Currency Pairing?
Looking ahead, the primary driver of movement for the Pound Euro exchange rate looking ahead to Wednesday will likely be further publications from the Eurozone.
Up first, the Bloc will release its latest consumer confidence index and its economic sentiment index for December, which are both expected to further deteriorate and could weigh on the common currency during the first half of Wednesday’s session.
Folloinwg that, the Eurozone will also release its latest industrial sentiment indicator and latest PPI data.
With the latest industrial sentiment indictor forecast to dip while PPI is forecast to rebound in November, EUR exchange rates could face a mixed trading session during the middle of this week.
Turning to the Pound, GBP exchange rates are likely to trade without a clear direction as UK data will be absent from Wednesday’s data calendar.
This content was originally published on ExchangeRates.org.uk