ExchangeRates.org.uk - At the time of writing GBP/EUR was trading at €1.1638, down approximately 0.2% from Tuesday’s opening rate. The Euro (EUR) managed to retain some of Monday’s gains throughout Tuesday’s session following some robust German data and ongoing market volatility. As market turbulence continued to lead investors towards more secure assets, the single currency’s safe-haven status leant EUR modest support. Additionally, the latest German factory orders data showed a significantly stronger-than-forecast rebound in June, rising by 3.9%. The figure sharply surpassed market projections of 0.8% growth and surged from the previous month’s 1.7% contraction.
Jens-Oliver Niklasch, senior economist at LBBW, said. ‘The increase in orders in June exceeded all expectations, even without major orders. But in the current dark grey mosaic of economic figures, this is just a single light green tile. More needs to come together to give the industry any real confidence.’
Meanwhile, ongoing economic slowdown fears in the US and China paired with concerns of escalating tensions in the Middle East continued to imbue markets with additional turbulence throughout Tuesday’s session.
Pound (GBP) Dips amid Market Turbulence
The Pound (GBP) fell against the majority of its peers this morning despite a forecast uptick in UK retail sales, amid ongoing market volatility. The British Retail Consortium’s (BRC) latest retail sales gauge printed in alignment with market projections, reporting a 0.3% rise in July. The data showed a notable rebound from a 0.5% slump in the previous month, indicating that UK consumer activity could be gaining some more traction throughout the second quarter of 2024.
Helen Dickinson, Chief Executive at the BRC said: ‘Retail sales returned to growth, driven by an increase in food purchases. Now that election uncertainty is over and Government is rolling out plans to kickstart economic growth, retailers are planning their own investment strategies. Many will be looking to the Autumn Budget, keen to see an end to business rates rises under the new Labour government.’
However, much like its EUR counterpart, volatile trading conditions and concerns of economic slowing across global superpower economies continued to drive notable volatility across the board, as anxious trade further deterred investor interest in the increasingly risk-sensitive Pound.
Pound Euro Exchange Rate Forecast: German Trade Data in Focus
Looking ahead, Germany is due to deliver its latest balance of trade report on Wednesday morning. Economists expect to see Germany’s trade surplus retreat from an eight-month high, falling to €23.5bn in June 2024. Should the data print as forecast, signs of cooling trade in the export-heavy economy could hamper EUR exchange rates. Germany’s latest industrial production data is also due for release on Wednesday. Forecast to rebound to 1% in June, following a 2.5% contraction in May, further signs of a recovering German manufacturing sector may lend the common currency support. Looking to the UK, a data-light calendar could see GBP exposed to market risk dynamics, with any downbeat trade likely to stymie the riskier Pound.
This content was originally published on ExchangeRates.org.uk
