ExchangeRates.org.uk - The Pound (GBP) struggled to garner investor interest on Thursday amid a data-light UK calendar. Amid an absence of new data, market risk dynamics served as the core catalyst of GBP movement, with an unclear market sentiment initially stifling GBP’s upside. However, Sterling benefited from some modest tailwinds in the wake of a better-than-expected services PMI, which seemingly kept the Pound afloat, as signs of acceleration in the vital sector reinforced a sense of UK economic optimism. Meanwhile, news that the British Chambers of Commerce (BCC) has increased its UK growth projections for the remainder of the year further buoyed GBP exchange rates, as economists continue to bet on an increasingly robust UK economy. Additionally, speculation that the Bank of England (BoE) could deliver a slower monetary unwinding cycle than that of other major central banks in the coming months continues to keep GBP afloat ahead of further economic releases. Towards the end of the session, an improving market sentiment served to keep the increasingly risk-sensitive Pound afloat, as investors favoured riskier investment options.
Euro (EUR) Wavers despite Improving German Factory Orders
The Euro (EUR) initially strengthened on Thursday morning following a surprise uptick in German factory orders. Factory orders in the Eurozone’s largest economy rose by 2.9% in July, slowing from the previous month’s upwardly revised 4.6% growth, but significantly surpassing market forecasts of a 1.5% fall. Additionally, the bloc’s latest retail data revealed that sales across the Eurozone grew by 0.1% in July, rising from a downwardly revised 0.4% contraction in the month prior. However, as an increasing appetite for risk permeated global markets, the safe-haven single currency struggled to garner support, as investors favoured its riskier rivals as the session neared an end.
Pound Euro Exchange Rate Forecast: German Trade Data in Focus
The Pound Euro exchange rate is expected to be driven primarily by several key economic data releases from the Eurozone in tomorrow’s session. The day will kick off with Germany’s latest trade balance report, which could provide early support to the euro. A rise in Germany's trade surplus, coupled with an anticipated increase in exports, is forecast to bolster EUR performance if the data meets expectations. Later in the day, attention will shift to the Eurozone’s third estimate of Q2 2024 GDP. Any downward revisions from previous figures may weigh on the euro, potentially reversing earlier gains. On the UK front, there will be no domestic data releases, leaving GBP largely influenced by broader market risk sentiment. If markets trend towards risk-on, Sterling may benefit, given its growing sensitivity to global risk dynamics.
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