Pound Euro (GBP/EUR) Exchange Rate Wavers Amid Absence Of Data
The Pound Euro (GBP/EUR) exchange rate wobbled on Tuesday amid a lack of both UK and Eurozone data releases.
At the time of writing, GBP/EUR traded at around €1.2022, virtually unchanged from Tuesday’s opening rate.
On Tuesday, the Pound (GBP) struggled to attract investor attention, partly due to a lack of UK economic data, which left GBP exchange rates susceptible to the day’s market sentiment.
Due to Sterling’s nature as a currency that is increasingly sensitive to risk, the Pound managed to hold its ground against riskier currencies, but weakened against its safe-haven alternatives.
Investors may have been hesitant to make bold moves on Sterling ahead of the Bank of England (BoE)’s upcoming interest rate decision this week, where a 25-basis-point rate cut is widely expected.
The Euro (EUR) managed to recoup the majority of its losses from Monday following US President Donald Trump’s announcement that tariffs on the Eurozone were ‘definitely coming’.
However, on Tuesday, the single currency managed to hold steady and even firm against several of its counterparts thanks to a bout of cautious trade.
As a safe-haven currency, the Euro was marginally lifted by Tuesday’s risk averse market mood despite the presence of any economic drivers.
Looking ahead, the primary driver of movement for the Pound Euro exchange rate looking ahead to Wednesday will likely be several publications from within the Eurozone.
The Bloc is expected to release its latest PPI data, its finalised PMI data for January as well as Germany’s finalised PMI data as well.
Should any of the data releases differ from market expectations, EUR exchange rates could be undermined during mid-week trade.
Shifting focus to the Pound, the UK is also set to release its finalised Services PMI index for January.
If the data shows that the crucial sector remained in expansion territory (a reading above 50), it could provide Sterling with some modest support.
Adam Solomon
Contributing Analyst
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