January 7, 2022 - Written by John Cameron
STORY LINK Pound Euro Exchange Rate News: GBP/EUR Rangebound amid Lower-Than-Forecast German Production Figures
GBP/EUR Mixed as German Industrial Productions Prints Below Market Forecast
The Pound Euro (GBP/EUR) exchange rate is trading flat in the beginning of today’s session in response to Germany’s disappointing industrial production data for November.
At the time of writing, the GBP/EUR exchange rate is trading at approximately €1.1971, with minimal market movement.
Euro (EUR) Directionless amid Lower-Than-forecast German Industrial Productions Data
The Euro (EUR) is trading in a narrow range against the Pound (GBP) this morning following the release of Germany’s industrial production figures for November.
Production growth slipped from October’s downwardly revised 2.4%, to -0.2%, missing forecasts for a modest 1% expansion.
The shock contraction is largely due to bottleneck supply issues and raw material shortages, and suggests that the recovery in the industrial sector remains susceptible to volatility.
Despite a decline in capital goods by 0.6%, production of motor-vehicles, trailers and semi-trailers, as well as production of intermediate, and consumer goods increased by 4.1% and 0.8%, respectively.
Economist, Carsten Brzeski, has warned that rising coronavirus case numbers may further weigh on the industry as supply chain issues are likely to continue.
‘The fourth wave of the pandemic and Omicron should send industrial activity back into hibernation.
‘German industry remains in the stranglehold of global supply chain frictions.
‘Supply chain frictions are not only leaving their mark on actual production but have started to spread and to undermine production prospects as reflected by dropping orders and weakening production expectations.’
As the fourth wave of coronavirus sweeps the Eurozone, many EU countries are tightening their rules in a bid to curve hospitalisation admissions.
This is likely to weigh on EUR, as investors are cautious of restrictive economies.
Pound (GBP) Rangebound as Coronavirus Fuels Staff Shortages
Meanwhile, the Pound (GBP) is muted against the Euro (EUR) at the beginning of today’s session, as the UK’s coronavirus situation remains a concern.
As case numbers continue to rise, staff shortages have caused additional strain on the NHS.
In a bid to support the NHS, the military have been deployed over 200 personnel at a London hospital to aid the remaining staff to care for patients.
40 of the deployed service personnel are Doctors, and the other 160, whom have no medical background, will be ‘conducting basic checks.’
Chris Hopson, the chief executive of hospitals group NHS Providers, said:
‘The fact that we need to call upon army medics and general duty personnel at all underlines the sheer scale of the workforce challenges the NHS is facing.
‘The experience of the pandemic makes plain underlying issues which need resolution – the need for a national long-term plan for the health and care workforce, ongoing challenges with vacancies and recruitment pre-dating the pandemic by a number of years.’
GBP/EUR Exchange Rate Forecast: Coronavirus to Remain at Centre Stage of EUR and GBP Markets
Looking ahead, the Pound Euro (GBP/EUR) exchange rate is likely to be weighed on primarily by coronavirus developments and Brexit negotiations during the first part of next week’s session due to a lack of notable data scheduled for release.
However, on Monday, the single currency may feel the pressure from the Eurozone’s unemployment report, with the Jobless rate forecast to slip from 7.3% to 7.2% in November.
On Wednesday, the EUR may be further weighed on by the bloc’s industrial production release for November which is forecast to dip from 1.1% to 0.7%.
Later in the week, Sterling may be buoyed by several data releases.
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TAGS: Pound Euro Forecasts