ExchangeRates.org.uk - At the time of writing, GBP/EUR traded at around €1.1834, virtually unchanged from Tuesday’s opening rate. The Euro (EUR) traded sideways against the majority of its peers on Tuesday as data from within the Eurozone remained scarce, which ultimately saw the single currency struggle to find a clear trajectory. Also limiting EUR movement are current political tensions in France. The latest polls continue to show Marine Le Pen’s far right party in the lead less than a week before the first stage of France’s parliamentary election. Concerns over France’s political future will likely remain a headwind for the Euro this week amid a continued absence of significant domestic data. Elsewhere, an unclear market mood is also undermining the safe-haven Euro. On the back of its position as a safe-haven currency, Tuesday’s uncertain trading conditions further prevented the single currency from finding a clear direction.
Pound (GBP) Muted amid Absence in Data
The Pound (GBP) also treaded water against the majority of its peers on Thursday as, similarly to the Euro, a continual lack of high impact UK data saw GBP struggle to find a clear direction. Further undermining the Pound on Thursday was the UK’s own upcoming general election. As Kier Starmer’s Labour Party are largely favoured to win the UK’s general election next week, and due to the party’s commitment to fiscal responsibility, a Labour victory will likely underpin Sterling sentiment. However, GBP investors were reluctant to place any overly aggressive bets ahead of the election, wary of any potential last-minute surprises. As such, the Pound is likely to remain listless amid a period of limited data and forward guidance.
GBP/EUR Forecast: German Data in the Spotlight
Looking ahead, the primary catalyst of movement for the Pound Euro exchange rate this week will likely be the publication of Germany’s latest GFK consumer confidence index for July. The index is forecast to show another rise in consumer confidence within the Eurozone’s largest economy, with the index forecast to increase from a previous reading of -20.9 up to -19.8. Should the data match expectations and confirm the highest consumer sentiment reading since April 2022, this will likely underpin EUR exchange rates during mid-week trade. Turning to the Pound, as high-impact domestic data will remain sparse this week, markets will likely cast their eye to the latest mid-tier data release, expected on Wednesday. The latest distributive trades survey from the Confederation of British Industry (CBI) is forecast to report a cooling in UK retail activity. Should the data match expectations, this could dampen Sterling sentiment on Wednesday. Risk appetite could also impact the GBP/EUR exchange rate this week. Should upbeat trade prevail this week, GBP/EUR could strengthen. However, should markets opt for safer assets instead, GBP/EUR could close the week on the back foot.
This content was originally published on ExchangeRates.org.uk
