Euro to British Pound (EUR/GBP) Exchange Rate Climbs after Eurozone Confidence Rallies
Although a report showed an unexpected increase in German unemployment, the Euro to British Pound exchange rate was still in a stronger position on Wednesday.
If you're looking to make an international money transfer, we recommend TorFX.
The EUR/GBP pairing held yesterday’s gains even as data revealed that the level of unemployment in Germany increase by nearly 24,000 this month instead of declining by the 15,000 expected.
The nation’s seasonally adjusted unemployment rate held at 6.7 per cent – an over two-decade low. The labour agency claimed that the rise in joblessness was the result of the mild winter, which saw seasonal occupations begin earlier in the year.
The increase in unemployment follows a decline in German business confidence and negatively revised growth forecasts for the Eurozone’s leading economy.
Earlier today figures showed that Germany’s import price index fell in April rather than stagnating as forecast. The measure dipped by 0.3 per cent in April, month-on-month, following a decline of 0.6 per cent in March.
Year-on-year the German import price index was 2.4 per cent lower.
However, the Euro was supported against the Pound as a gauge of economic confidence for the Eurozone showed a stronger than anticipated increase in May.
The measure of executive and consumer sentiment beat expectations for a reading of 102.2 by advancing from 102 to 102.7 this month.
Eurozone services confidence climbed from 3.5 to 3.8 while industrial confidence in the currency bloc advanced from a positively revised -3.5 to -3.0. A reading of -4.0 had been expected.
The Eurozone’s final consumer confidence figure was unchanged from initial estimates at -7.1.
The report prompted this response from one Copenhagen-based analyst; ‘Economic confidence is improving in line with consumer confidence and business sentiment. The change in sentiment will gradually unleash pent-up demand in investments and durable goods, leading to a stronger recovery in the second half.’
The Pound, meanwhile, came under additional pressure as the Confederation of British Industry’s reported sales data showed a slowing in domestic retail sales growth.
In the view of CBI representative Barry Williams; ‘Retailers’ predictions of further sales growth bore fruit this month. Although that growth was at a slower rate than expected, the fact we’ve seen a steady increase for six consecutive months is a sign we’re heading towards sustainable growth and strengthening consumer optimism – and it’s good to hear shopkeepers telling us they expect even stronger figures next month.’
Tomorrow a lack of economic reports for the Eurozone is likely to limit movement in the EUR/GBP pairing.
That being said, the UK’s Lloyds business barometer (due out at 09:30 GMT) could have a modest impact on the Euro to Pound exchange rate.
Currently the Euro is trading against the British Pound in the region of 0.8124 and is trading against the US Dollar in the region of 1.3619.