GBP to EUR Exchange Rate Under Pressure From Encouraging German And French Data Sets

Modified: Friday, 23 November 2012 09:02 BST - Written by David Woodsmith

STORY LINK GBP to EUR Exchange Rate Under Pressure From Encouraging German And French Data Sets

A slew of eurozone data, released in the early part of this morning’s European session, has proved generally supportive for the euro. The most significant individual figure came in the form of the latest German GDP Growth number for Q3. The finalised release revealed that, as expected, economic activity in the eurozone’s leading economic power expanded by an anaemic 0.2% in the three months to the end of September. This equates to an annualised growth rate of 0.9% for the Teutonic superpower.

Picking through the rest of the data, a brace of French releases suggested that matters may be slightly ‘less bad’ than had been presumed in France. This month’s France Business Confidence Indicator bettered analysts’ expectations to print at a healthy 88, while the France Production Outlook Indicator was also stronger than had been expected, showing at -40 when investors holding euros had feared a print of -53.

Up to this point, the euro has not derived any major benefit from these data sets on the session. The GBP EUR exchange rate continues to linger around the mid to high 1.23s where it was residing at the close of yesterday’s European equities session. However, with the majority of today’s volume in the currency markets still remaining to be traded, further downside for the pair cannot be ruled out.

Elsewhere, last night’s Asian session saw the release of another encouraging figure from China; the latest MNI Flash Business Sentiment Indicator showed a marked increase from last month’s 51.86 showing to register at 53.57. This positive figure builds on Thursday’s relatively strong Chinese HSBC Flash Manufacturing PMI survey, adding to the impression that China’s economy is finally turning the proverbial corner after a difficult 2012. If this causes investor sentiment to improve, then expect the GBP USD exchange rate to push on through the 1.6000 level later today.

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