Pound To Euro Week Ahead Forecast: One-Month Best To Hold Ahead Of UK Inflation
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The Pound Euro (GBP/EUR) exchange rate traded in a wide range for the majority of last week before ending the week on a positive note, hitting a fresh one-month high. At the time of writing, the GBP/EUR exchange rate traded at around €1.1724, up roughly 0.5% from the start of the week. Euro (EUR) began last week fluctuating as mixed German data left the common currency struggling to catch bids as a large contraction in German exports in February was offset by strong growth in industrial production. On Thursday, EUR exchange rates tumbled in the wake of the European Central Bank (ECB)’s latest interest rate decision. While the central bank left rates unchanged at 4.5% for a sixth consecutive time in April, the accompanying forward guidance stated that lower rates are on the way, which prompted markets to lock in a June rate cut. Pound Sterling (GBP) started the week trading without a clear direction before GBP exchange rates firmed on Tuesday, underpinned by the latest retail sales monitor from the British Retail Consortium (BRC). On Thursday, the Pound enjoyed some modest support following some hawkish observations from (BoE) external monetary policy member Megan Greene. Following the UK’s latest GDP print, where the Office for National Statistics (ONS) confirmed market expectations of a 0.1% increase following January’s upwardly revised 0.3% figure, the pound wobbled despite hopes that the UK is on its way to escaping its winter recession. Looking ahead, the primary driver of movement for the pound euro exchange rate this week is likely to be the release of both the UK’s and the Eurozone’s inflation data for March.