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Pound euro exchange rate: GBP climbs after touching 2018 low


Investors looked to buy a cheaper pound following some underwhelming Eurozone data.

Despite today’s rise, the pound to euro exchange rate was still trending below the week’s opening levels and could be on track for another week of losses if the euro remains resilient.

There has been little change in the market mood regarding the pound, as investors remain anxious that a ‘no-deal’ outcome to Brexit negotiations is still a real possibility.

Economists fear that such an outcome could have a serious impact on UK-EU trade, as well as business and consumer activity.

Some investors have simply been buying the pound back from its cheapest 2018 levels in profit-taking, enabling the pound to euro exchange rate to climb a little.

Stronger market demand for the US dollar as well as some underwhelming Eurozone data caused some investors to bail out of the euro.

Furthermore, today saw the publication of GfK’s German consumer confidence report for September, which fell short of forecasts by unexpectedly slipping from 10.6 to 10.5.

In its report, GfK stated that despite this slip: “The positive outlook for the consumer economy will only continue if the job market remains stable, which is the current assumption.”

With the German consumer outlook still generally optimistic and France’s Q2 Gross Domestic Product (GDP) growth projection meeting a solid 0.2 per cent as expected, the euro’s weakness was limited and was mostly driven by the US dollar recovery.

Still, with some more influential Eurozone data due for publication before the end of the week, the pound to euro exchange rate could still recover more of this week’s losses.

Thursday will see the publication of the Eurozone’s final August confidence survey stats, as well as German unemployment and inflation rate figures for August.

The Eurozone’s own key inflation rate figures will be published on Friday.

Friday is also when Britain’s August consumer confidence report from GfK comes out, although Sterling’s potential for gains is limited so long as those ‘no-deal’ Brexit jitters persist.



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