The Pound to Euro exchange rate (GBP/EUR) remained broadly unchanged this morning, after the preliminary estimate of UK gross domestic product was released exactly in line with market expectations. The UK currency edged higher following the announcement to a high just above 1.1750 GBP/EUR versus the Euro, but quickly relinquished any gains, as the market was disappointed that the data failed to exceed expectations. The Pound is poised to gain this week against most major currencies, with the exception of the Euro, as the report does confirm that the UK economy continued to expand in the three months to September at the fastest pace in more than three years.
There was widespread speculation of a positive figure, after the BoE Governor Mark Carney said on Thursday that the central bank will widen access to money market operations. A number of major banks are forecasting that the Pound will continue to make gains versus the U.S Dollar, but the resilience of the Euro is somewhat surprising given the ongoing concerns surrounding the sustainability of the European economic recovery. A plethora of negative economic reports in France and fears over debt levels within the peripheral economies will threaten to derail the recent level of growth in the Euro-zone.
However, the single currency continues to make strong gains versus the Dollar and that seems to be setting the trend versus the Pound. German business confidence unexpectedly weakened for the first time in six months for October, figures released this morning showed, and German factory orders also declined. Germany emerged from its longest ever recession in the second quarter thanks in part to the industrial sector and although the pace of manufacturing has increased month-on-month, the report on orders will be cause for concern.
Relevant Euro exchange rates for the article:
The GBP/EUR (Pound Sterling/ Euro exchange rate) is 1.1719. The EUR/GBP (Euro/ Pound Sterling exchange rate) is 0.85330