industry

Pound euro exchange rate: GBP gains against EUR as UK inflation beats forecasts


The pound has been holding its ground in recent sessions due to a lack of noteworthy data releases.

Although the haze of uncertainty surrounding Brexit has continued to curtail GBP strength.

It comes as latest inflation results showed year-on-year inflation rate was set to come in at 2.4 per cent.

Month-on-month, the figures were healthy too, with a 0.7 per cent rise being reported in August, compared to the dead-flat rate of zero per cent seen in July.

The euro continues to remain sturdy, with recent Eurozone economic data being unsurprising.

Of more significance for the single currency has been the influence of its main rival, the US dollar.

With the US dollar being weaker in recent sessions due to trade war fears, the euro has been able to more easily avoid major losses versus the pound.

Looking ahead, pound euro is likely to be influenced by some potential Brexit developments towards the end of the week.

Commentators expect to see major progress being made in UK-EU negotiations in the coming days at an EU summit set to start in Brussels tomorrow.

Speculation has arisen that the UK and EU are prepared to discuss alternative solutions to the highly contentious issue of the Irish border.

Due to the importance of the Irish border issue, any signs of progress on making some kind of agreement could significantly boost the pound.

Added to this, some notable UK and Eurozone data could also have influence on the pound in the coming sessions, with Britain’s August retail sales results being published tomorrow.

Eurozone consumer confidence data from September will also be printed tomorrow, followed by the Eurozone’s September PMI projections on Friday.

Both data sets are expected to show a decline on the previous month, so it remains to be seen which one investors consider to be the more influential.



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