Pound Euro (GBP EUR) Exchange Rate at 1.17 before German IFOs

August 24, 2016 - Written by James Fuller

STORY LINK Pound Euro (GBP EUR) Exchange Rate at 1.17 before German IFOs

Euro Exchange Rates Falter after German Data Disappoints, GBP Pushes Higher

Support for the Euro (currency : EUR) slumped during yesterday’s session, propelling the Pound Euro (GBP EUR) exchange rate up to an intraday high of 1.1656 GBP EUR during the latter stages of London’s equities session. A slew of Purchasing Manager Index surveys from the euroland turned investors against the single currency on the day, with a series of worrisome German PMIs particularly weighing down the euro. Markit – the research agency which issued the most concerning release – explained the disappointing German data set thus -

‘August saw output in Germany’s private sector expand further, with the pace of increase broadly in line with the trend observed over the past three years of data collection. However, at 54.4, down from 55.3 in July, the Markit Flash Germany Composite Output Index signalled a weaker pace of expansion. The slowdown was largely attributed to the service sector, where activity rose to the smallest degree in 15 months.’

Slowing German Economy Could Bolster Pound Euro Exchange Rate Trading

Delving further into the survey results, Oliver Kolodseike of HIS Markit, noted that,

‘Today’s survey results highlight that the German economy is continuing its uninterrupted upward trend in August. However, output, new orders and employment all rose at slightly weaker rates during the month, thereby signalling that business conditions have become a bit more challenging since the prior month.’

Kolodseike went on to assert that, ‘a closer look at the underlying data reveals a note of caution for service providers. Not only did business activity rise at the slowest pace since May 2015, but confidence about the 12- month outlook dropped to a near two-year low.’

Further Pound Euro Exchange Rate Movement Forecast This Week

Further movement is forecast for the Pound Euro exchange rate during the next 24hrs with the publication of more German economic gauges tomorrow morning. This time it’s a triumvirate of surveys from IFO; if August’s Business Climate, Current Assessment and Expectations surveys also disappoint, then expect the Pound Euro exchange rate to record further near-term gains.

Conversely, if the German ecostats impress the Pound (GBP) could fail to sustain its recent gains against the common currency.

The only UK ecostat published today was the BBA Loans for House Purchase number for July, but its impact on the Pound Euro currency pair was limited.

The report showed a decline in lending in July and a negative revision to June's figure. Although a potentially GBP EUR negative outcome, the Pound shook off the impact of the report and remained trending higher against the majority of its currency counterparts. Ahead of the ecostat's publication the Pound was able to strengthen to 1.17 against the Euro. However, many industry experts aren't expecting the current Pound surge to last for a considerable period.

That being said, tomorrow's UK CBI data may allow the uptrend to continue in the short term if it prints well. Friday's Q2 GDP data for the UK is likely to have a greater impact on Pound Euro exchange rate trading.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Daily Currency Updates Poun Forecasts