ExchangeRates.org.uk - At the time of writing, GBP/EUR traded at around €1.2000, down roughly 0.4% from Wednesday’s opening rate.The Euro (EUR) climbed against most of its peers on Wednesday as the single currency was bolstered by news that the expected members of Germany’s next coalition have agreed to a debt brake deal.
The Euro was also underpinned by a declining US Dollar, given the currency’s negative correlation.
Finally, a mixed data reading from the Bloc failed to undermine the single currency despite the publication of a worse-than-expected services PMI reading and a better-than-expected PPI reading.
On Wednesday, the Pound (GBP) held its ground against most of its major peers following the release of the UK’s latest services PMI.
The finalised index for February stayed in expansion territory (a reading above 50) with a reading of 51, up from 50.8, slightly below the expected 51.1.
Nevertheless, Sterling maintained its strength, even gaining some ground against some of its counterparts.
Looking ahead, the primary driver of movement for the Pound Euro exchange rate looking ahead to Thursday will undoubtedly be the European Central Bank (ECB)’s upcoming interest rate decision.
The central bank is widely expected to deliver an interest rate cut of 25 basis points.
However, should the rate cut be accompanied with some dovish forward guidance, the Euro could slip as we move into Thursday’s session.
When it comes to the Pound, there’s no UK data scheduled for Thursday, which means Sterling might trade without a clear direction.
This content was originally published on ExchangeRates.org.uk