Pound To Euro: The GBP/EUR Exchange Rate Slips Further After Today's BoE Decision

Foreign exchange markets were disappointed by the latest UK consumer price index, causing the GBP to EUR exchange rate to slump by nearly a cent.

• The Pound to Euro exchange rate today: -0.11pct lower on the day at 1.17808.
• The Pound to US Dollar exchange rate today: -0.22% lower at 1.32328.
• Super Thursday could see sterling slide on the latest BoE policy statement.

Even though July’s Eurozone trade surplus unexpectedly narrowed from 29.2 billion to 25.3 billion Euros this was not enough to shore up the GBP/EUR exchange rate.

While UK Retail Sales proved resilient investors remained in a cautious mood ahead of today’s Bank of England policy meeting, keeping the Pound on a weaker footing.

The British pound gave up on holding its ground later on Wednesday’s session as investors became increasingly anxious ahead of Thursday’s Bank of England (BoE) meeting.

While the bank is not expected to be introducing any new easing measures just yet, the lack of optimistic August ecostats from the last week weighs on hopes that the bank will take on a hawkish tone. A dovish tone, or an insistence that current easing and further easing will still be necessary could cause GBP to plunge tomorrow.

After the UK’s first raft of post-referendum jobs data offered a rather mixed picture investors were inclined to remain bearish on the Pound Sterling.

Although the GBP/EUR exchange rate has remained on a narrow trend in the wake of the data downside pressure is expected to mount ahead of Thursday’s Bank of England policy decision.

The Pound Euro exchange rate defended its position after today's UK job report showed employment hit a fresh high.

GBP/EUR pushed further into its new weekly worst levels on Tuesday afternoon as investors continued to adjust and react to analysis following Britain’s underwhelming August Consumer Price Index stats.

With the pair edging closer to the key level of 1.1700, it may be difficult for Sterling to make a solid recovery.

An increasing number of analysts are suggesting that Tuesday’s CPI report will not only persuade the Bank of England (BoE) to continue its aggressive new stimulus measures, but also that there was still room for additional easing.

Core UK inflation held at 1.3% in August, while non-core price growth continued at 0.6%, weakening the Pound Sterling to Euro exchange rate (GBP/EUR).

Markets were disappointed as price growth had been forecast to tick higher by ten basis points in both fields.

Warnings from economists that UK inflation would still spike about the Bank of England’s (BoE) 2% target continued to weigh on GBP.

Here’s a quick look at the latest up to date currency FX rates for Pound Sterling;

At time of writing the pound to euro exchange rate is quoted at 1.165.

The pound conversion rate (against us dollar) is quoted at 1.255 USD/GBP.

Please note: the FX rates above, updated 4th May 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.

The day’s weak UK data allowed Euro (EUR) to advance, despite overall weakness in the latest Eurozone data.

Finalised German CPI data has reprinted at earlier estimates, showing no price growth in August and year-on-year growth of 0.4%, creating further headaches for the European Central Bank (ECB).

The outlook wasn’t looking too rosy, either, with the German ZEW current situation and the German and Eurozone economic sentiment indices all disappointing forecasts.

These releases were not enough to counteract the positive affect of the dovishness in the bond markets, which continued to boost the Euro (EUR) as markets speculated that the ECB were planning to scale back quantitative easing.

UK joblessness data is due for release tomorrow, before the Bank of England’s policy meeting on Thursday, suggesting strong Pound Sterling (GBP) exchange rate movement ahead.

Labour market data is expected to hold steady on previous months, with the claimant count rate remaining at 2.2k and the employment change figure for the three months to June remaining at 172k.

However, wage growth is predicted to slow, with average earnings falling from 2.4% to 2.1% and earnings excluding bonuses weakening ten basis points to 2.2%, which could weigh on Pound Sterling exchange rates.

The Bank of England’s (BoE) next policy decision will be announced on Thursday, with markets looking to the accompanying statement for clues of further post-Brexit stimulus.

BNP EUR Forecast; Long EUR/GBP Exchange Rate Target at 0.8717

So what direction is the Pound Euro (GBP/EUR) exchange rate likely to take next?

Tomorrow’s Eurozone industrial production figures for July are expected to show an uptick in output on the month from 0.6% to 1%.

A decline on the year is forecast, with production falling -0.8% after the previous month’s 0.4% growth.

Meanwhile, BNP Paribas has identified a long EUR/GBP trade signal, setting a new target of 0.8717 instead of the earlier 0.8627.