The GBP/EUR charts are pointing higher at the start of this trading week. The markets attention will turn to the Bank of England on Thursday when their interest rate decision is unveiled. The decision is set to either make or break the Pound Sterling, which recently gained on positive economic data. These gains could be at risk should the BoE vote in favour of the cut, however. Meanwhile, the Euro performed amongst the worst of the major currencies last week. This week looks to follow suit as the release of the survey of German businesses was announced earlier this morning, with disappointing results.
Charts Suggest GBP Has More Gains to Come but the BoE Will Have the Final Say
As the new trading week gets underway, the GBP/EUR charts are pointing higher in favour of the GBP. This will be positive news to investors who rejoiced over record beating economic data releases last week. The figures showed the highest ever employment rate for the UK and showed a steady increase in both the manufacturing and services sector. As a result, the GBP gained on many of its rivals. This week will be an important one for both the GBP and its interlinking rival currencies as the Bank of England will make their monetary policy decision. Before the economic breakthroughs, the BoE’s rate cut bet was sitting above a 60% chance. Now the bets are lower but not completely off the cards. A shock rate cut could see the GBP drop its recent gains as confidence reduces. But if the BoE hold off on the rate cut, this could signal a successful rebound for the UK economy and would likely see the currency skyrocket against the Euro and other poor-performing rivals.
Euro Looks to Be on a Downward Spiral After German IFO Data Release
This morning saw the release of key German sentiment data. The returns were described as “bafflingly weak”, suggesting that the poor performance came as a shock to the market. This gave the hopes for a resurgence in the German economy a knock. The German ifo Business Climate Index read at 95.9 in January. Predictions were looking for around 97.0 so this came as a disappointment to the market. The reading also came in lower than the previous month of Decembers figure of 96.3. Investors are hoping that the US-China Phase One deal being signed will provide a chance for the Eurozone economy to benefit from the global trade outlook. But with today’s poor yielding data, the Euro will now be under fire once more.
If you have any GBP/EUR currency transfers to consider and wish to be kept up to date with all the events and news in the market ahead of this potential crucial time. Feel free to contact myself, Jonathan Watson, using the form below.