GBP/EUR Exchange Rate Fractionally Softer on British Data
Despite the fact that Italy has fallen into recession, the Pound Sterling to Euro (GBP/EUR) exchange rate softened by around -0.10% on Friday afternoon. This is as a result of a bearish Sterling run which was lubricated by less-than-impressive construction output.
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The Pound Sterling to Euro exchange rate is currently trending in the region of 1.2562.
Sterling (GBP) Slumps on British Data
Having been on a bearish run from a number of less-than-ideal data publications, the Pound’s downtrend was fuelled by yet more disappointing domestic data. Seasonally adjusted year-on-year Construction Output was unable to meet with the median market forecast of a rise from 0.8% to 4.3%, with the actual result only reaching 3.5%. On a monthly basis, Construction Output was forecast to increase from -3.0% to 4.0%, but the actual result only hit 1.8%.
The Pound Sterling to Euro exchange rate has dropped to a low today of 1.2549.
Slow European Growth sees Euro (EUR) Struggle
Although French Gross Domestic Product met with forecast figures, and both German and Eurozone GDP improved upon economists’ predictions, the single currency has generally softened against the majority of its most traded currency rivals. This is because the growth figures indicated that the German and Eurozone recovery was sluggish. In addition, Italian GDP indicated that their economy has moved into recession.
‘Today’s figures show continued very sluggish growth in the Eurozone, but it has avoided lapsing back into recession. The former powerhouse of the bloc, Germany, grew at a modest rate of just 0.1% in Q3, while France was the surprise with growth of 0.3%. However, the detailed data showed that the ‘French surprise’ was primarily driven by relatively strong government spending growth, which is unlikely to be sustainable in the medium term. Meanwhile, Italy has fallen back into a mild recession,’ stated Richard Boxshall, senior economist at PwC.
Pound to Euro (GBP/EUR) Exchange Rate Forecast to Decline
With an absence of economic data to curb the trend, the Pound to Euro exchange rate is likely to continue to depreciate over the course of the weekend.
The Pound Sterling to Euro exchange rate has advanced to a high today of 1.2599.