GBP/EUR & EUR/GBP Weekly Forecast
Good morning everyone,
Last week saw the GBP/EUR exchange rate edge higher, despite broad UK economic concerns. This was partly due to some better-than-expected UK economic data, as well as political jitters weighing on the Euro. After opening last week at €1.1408, GBP/EUR fluctuated between lows of €1.1352 and highs of €1.1495 throughout the week. GBP/EUR closed the week at €1.1446.
This week so far, GBP/EUR has seen modest losses and at the time of writing was trending near the level of €1.14. The pair could be in for further losses if upcoming UK data disappoints, but it may advance instead if the data impresses and with what clues we’ve seen already it looks like GBP/EUR could be in for more gains and possibly test the highs of last week.(€1.1495).
Hopes that UK data were beginning to pick up has supported the Pound, while the Euro has been weighed by mixed PMI data and various political uncertainties over the past week. Both Italy and Spain have had a turbulent week in politics, with Italy seeing the formation of a new populist coalition government and Spain’s ex-Prime Minister Rajoy being pressured out of power by a ‘no-confidence’ vote. Still, it was not enough to help the Pound to continue holding its ground on Monday morning.
Tuesday will see the publication of Britain’s anticipated May services PMI report from Markit. The figure is expected to have improved slightly, from 52.8 to 53. As services make up a notable chunk of Britain’s economic activity, this data could support Bank of England (BoE) interest rate hike bets and Sterling strength if it impresses. Stronger-than-expected UK services stats could lead to another week of GBP/EUR gains, but the Euro could also find stronger domestic support this week. Eurozone retail sales results will be published on Tuesday, followed by Eurozone growth projections on Thursday and German trade balance results on Friday.
While Brexit talks resume today there is a sense of optimism as we heard towards the next deadline date for progress. This weeks movements look to be coming from today’s UK Services data.
- Anyone looking to do GBP/EUR exchanges this week may want to see how UK services data comes out. If we see a positive result then GBP/EUR will move higher.
- Anyone looking to do EUR/GBP exchanges this week may want to make their exchange before today’s data as early indications is for a positive result for the UK, weakening the EUR/GBP rate.