Pound euro exchange rate: GBP slips back as Carney agrees to stay on | City & Business | Finance
So far today, the pound to euro exchange rate has seen tight movement as investors anticipate major UK and Eurozone datasets due for publication tomorrow, as well as the Bank of England’s (BoE) September interest rate decision.
Investors sold off the pound yesterday, pushing it back from its best levels as news broke that the Bank of England (BoE) had confirmed Mark Carney’s term at the helm would be extended until January 2020.
The news itself was generally perceived by traders as positive, but markets had priced in the assumption that Carney’s term would be extended for much longer than just seven months.
Disappointment that Mr Carney would not be around to act as a ‘caretaker’ until late-2020 or even 2021 caused concern about the consistency of BoE policy going forward, especially in the early years of post-Brexit Britain.
On the other hand, some positive UK data helped the pound to avoid further losses. Wage figures beat forecasts in both major prints according to Tuesday’s reports, with some analysts suggesting that the upward trend in pay could continue over the coming months.
The euro has been driven mostly by strength in rivals including the pound so far this week, but it did find some additional support yesterday in the form of the Eurozone’s solid employment figures.
ZEW’s economic sentiment survey for the Eurozone and Germany beat forecasts in every print, which had the effect of pulling the pound euro exchange rate back more from its best levels.
Today, unless there are any surprising developments in Brexit negotiations or more US-EU trade jitters, the pound to euro exchange rate could continue to see relatively tight trade until tomorrow.
Investors will have plenty to work on throughout Thursday’s session, including August inflation data from Germany and France.
However, the biggest events of the day and the week in general will be the September policy decisions from the Bank of England (BoE) and the European Central Bank (ECB).
If these central banks change their tone on the outlook for their respective economies the pound to euro exchange rate is likely to see some late-week jumps in movement.