Pound to Euro exchange rate: Could Sterling make further gains against the Euro next week?

GBP EUR Exchange Rate: The Week Ahead October 3rd

The pound to euro exchange rate stands at 1.1629 today, just 0.17% below its recent 26-week interbank rate high, reached on October 21st, of 1.1649.

In part, this is because markets think that there’s a low chance of a ‘No Deal’ Brexit. This is because all the UK’s main political parties, except for Nigel Farage’s Brexit Party, are campaigning on the basis of the UK exiting Europe with an agreement.

Shifting polls: GBP to EUR rate might be affected by UK election campaign shifting polls

Next week, the pound to euro exchange rate could be affected, among other things, by the UK’s ongoing election campaign, including the shifting polls. According to the latest surveys, the Conservatives stand at 38%, ahead of Labour’s 26%. Traditionally, a 10% lead has brought the winning party a majority of MPs.

However, it’s worth noting that, under the UK’s First Past The Post electoral system, it’s difficult to predict the result of next month’s vote. According to Viraj Patel, a strategist with Arkera, there are “scarily muddle-through odds when it comes to UK political outcomes.”

So the election campaign and polls could be worth watching, for their effect on sterling exchange rates.

Euro being held back Eurozone’s slow growth, ECB’s low interest rates

Meanwhile, the euro is being held back, in part by the Eurozone’s lacklustre economic performance, plus the European Central Bank’s very low interest rates, reports Reuters.

Next week’s key Eurozone economic data includes Tuesday 14th’s economic growth figures for Q3, over the Summer, and Friday 15th’s inflation statistics for October, which could affect the euro.

Next week packed for UK economic data which may affect sterling

Key UK economic data for next week include the UK’s GDP (Gross Domestic Product) figures for Q3, between July and September, released on Monday 11th.

On Tuesday 12th, we’ll learn the UK’s unemployment rate and wage growth figures for the three months to September. It’s thought that jobless will stay near a four-decade low of 3.9%, while salaries will increase at 3.8%, close to the fastest pace in a decade.

On Wednesday 13th, the UK’s inflation results for October will be revealed, while UK retail sales for October come out on Thursday 14th, forecast at 0.2%, above September’s 0.0%. These releases may be worthwhile watching too, for their influence on the pound.

If you would like to learn more about what may affect sterling rates next week or have an upcoming currency transfer, feel free to contact our currency specialists using the form below.