The Pound has started to recover against the EUR during Monday’s trading, following a tough couple of weeks. Today’s move has seen GBP/EUR levels spike back to 1.3435 at the high, before dropping back below the 1.34 threshold by close of European trading. This move will bring some relief to those clients holding GBP, after watching the Pound’s value deteriorate at an alarming rate recently.
Today’s move came about due to poor Eurozone Investor Confidence figures, which came out under expectation and immediately caused the EUR to weaken. Whilst I do not feel this move signals the start of a full recovery it is likely Sterling will now start to find support around the current levels, ahead of a busy week of economic data releases.
Looking ahead and we have a host of key data releases this week, which are likely to cause additional movement on GBP/EUR exchange rates. Tomorrow we have UK Industrial & Manufacturing Production figures, along with the latest Gross Domestic Product (GDP) estimate by the NIESR. This release is considered extremely reliably by investors and will give us a key insight into UK economic growth during the last 3 months. On Wednesday we have Eurozone Industrial Production, which is meant to show a drop on previous, along with BoE governor Mark Carney’s latest speech. However, it is Thursday which is likely to dominate headlines, along with the latest BoE interest rate decision and monetary policy statement. Whilst it is widely anticipated that rates will be kept on hold at 0.5%, it is the subsequent statement that will be most interesting to clients. Any indication of future monetary policy stance, or a prospective interest rate hike is likely to cause further volatility for the Pound.
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