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Euro Pound Exchange Rate Update: EUR Climbs against Battered Sterling after Late Eurozone Confidence Boost

Published: 21 Dec at 4 PM Tags: Pound Sterling, Euro Exchange Rate, Currency Exchange, Euro Crisis, UK, Exchange Rates, Spain, Pound Euro Exchaneg Rate,

Euro Jumps in Demand against GBP as Eurozone Confidence Stats Surprise Investors

While the Eurozone consumer confidence flash for December was expected to improve regardless, the fact that it moved closer to a positive range than expected proved greatly beneficial to the Euro against the Pound.

An advance to 0.84 in the pairing was recorded on Thursday afternoon, although the Euro had remained strong against Sterling for most of the day owing to investor optimism.

Looking forward to remaining Eurozone data before Christmas Day on the weekend, Thursday will bring the European Central Bank (ECB) economic bulletin in the morning.

This is expected to show a summary by the central bank of previous Eurozone developments, as well as a potentially positive outlook on the future.

Other news of note before the weekend will include Thursday’s Spanish trade balance for October, which has a deficit reduction on the cards.

Friday’s last major Eurozone news will cover the German GfK consumer confidence result for January, although unlike other Eurozone announcements, this has been pessimistically predicted to fall from 9.8 to 9.7.

Pound Euro Exchange Rate Outlook: Uncertain Future ahead for GBP EUR Rate on High-Impact GDP Results

The Pound has been deeply unsettled against its peers today, with a slump to 1.18 against the Euro coming alongside major losses elsewhere for GBP.

The source of this dwindling confidence in the Pound has been the November public sector net borrowing stats, which have shown an alarming expansion in Government borrowing from -4.32bn to -12.21bn.

Further GBP softness has been caused by overall Brexit uncertainty, which has not been helped by a lack of clarity by the Prime Minister during recent questions from the Commons ‘Brexit’ Committee.

Two big UK announcements are expected over the remainder of the week, with December’s GfK consumer confidence figures arriving early on Thursday and Friday morning seeing final GDP growth rate stats for Q3 announced.

The GfK result is actually expected to improve from -8 to -6, but the equally important GDP stats have more uncertain outcomes forecast.

In the major annual field, a rise from 2.1% to 2.3% is expected, although on the quarter a dip from 0.7% to 0.5% is due.

Any signs of the UK’s economic health after the Referendum are being seized on by investors as indicators of future economic movement, so these final UK releases before Christmas may well trigger a last-minute shift for the Pound Euro exchange rate.
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