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By Adam Solomon
Published: Jul 07, 2024 at 22:30
Updated: Jul 07, 2024 at 22:30
GBP to EUR Week Ahead Forecasts
BREAKING: The Pound Euro (GBP/EUR) exchange rate is seen trading at 1.1836 (+0.12%) after French Election exit polls showed Le Pen's National Rally came third. According to the exit polls the left-wing New Popular Front coalition won the second voting round of parliamentary elections. The Pound Euro (GBP/EUR) exchange rate traded in a wide range last week as the UK held its general election. At the time of writing, the GBP/EUR exchange rate traded at around €1.1808, virtually unchanged from the start of Friday’s opening levels. The Pound (GBP) began the week wavering against its peers following an underwhelming manufacturing PMI index, however, losses were limited as the index remained in expansion territory (a score over 50). On Tuesday, Sterling was underpinned by an upbeat market mood thanks to its nature as an increasingly risk-sensitive currency, as UK data was absent. Moving into mid-week trade, the Pound was supported by the publication of the UK’s finalised services PMI. June’s all-important services index was revised higher, coming in at 52.1, above the preliminary estimate of 51.2. On Thursday, the day the UK headed to the ballot box, GBP was trapped in a narrow range as investors were reluctant to place any aggressive bets ahead of the results. On Friday, the UK Labour party secured a landslide victory, winning 410 out of the 650 seats in parliament. However, as Kier Stermer’s majority was widely expected, Sterling was largely unmoved following the results. The Euro (EUR) began the week hitting multi-week highs against the majority of its peers after the first round of the French election showed less support for the far-right National Rally than some polls had anticipated. However, on Tuesday, EUR faced fresh selling pressure in the wake of the Eurozone’s preliminary consumer price index for June. Headline inflation cooled from 2.6% to 2.5% in June, ramping up bets on further interest rate cuts from the European Central Bank (ECB). Looking at the middle of the week, the single currency was undermined by some mixed domestic data. The Eurozone’s final services PMI was revised slightly higher, however, producer price inflation cooled. This led markets to further speculate on ECB interest rate cut bets, ultimately hobbling the Euro in mid-week trade. On Thursday, the Euro was unmoved by a slowdown in Germany’s latest factory orders as the ECB’s latest meeting minutes revealed that not all policymakers were in favour of an interest rate cut during its last interest rate decision meeting. However, the common currency closed the week on the back foot as slower-than-forecast retail sales growth undermined EUR. Looking ahead, the primary catalyst of movement for the Pound Euro exchange rate this week will likely be several data releases from the UK. On Wednesday, Bank of England (BoE) official Huw Pill is scheduled to deliver a speech. As the BoE cancelled all public statements ahead of the UK’s election, GBP investors will cast their eye to Pill’s upcoming commentary for any hints surrounding monetary policy in the UK. On Thursday, the latest UK GDP data is forecast to show a slight increase which could bolster the Pound towards the end of the week. Turning to the Euro, data from within the Eurozone is scarce this week, which may see EUR exchange rates struggle to find a clear trajectory for the majority of the week. However, Monday will reveal France’s final round of elections and could infuse significant volatility into EUR exchange rates should France’s far-right party secure a majority. 
Euro (EUR) Wobbles following Several Data Releases
GBP/EUR Exchange Rate Forecast: UK Data to Drive Movement
Adam Solomon
Contributing Analyst
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