February 6, 2025 – Written by David Woodsmith
STORY LINK The Pound to Euro News: GBP/EUR Exchange Rate Subdued following Eurozone PPI
The Pound Sterling traded mostly flat against the Euro on Wednesday following the release of the Eurozone’s latest produce price index (PPI).
At the time of writing, the Pound Euro (GBP/EUR) exchange rate was trading at around €1.2023, virtually unchanged from Wednesday’s opening levels.
On Wednesday, the Euro (EUR) held its ground against most of its counterparts following the release of the Eurozone’s latest producer price index.
The index for December matched market expectations, coming in at 0.4% and marked the third consecutive monthly increase.
Despite the data aligning with forecasts, the Euro failed to gain significant momentum and remained largely unchanged throughout Wednesday’s European trading session.
On Wednesday, the Pound (GBP) faced difficulties in gaining support and declined against several of its counterparts after the release of the UK’s finalised services PMI for January.
The all-important services index for January came in at 50.8, falling short of the preliminary estimate of 51.2.
While the index still indicated expansion (a reading above 50), the downward revision from the preliminary estimate dampened sentiment toward the Sterling during mid-week trading.
Looking ahead to Thursday, the primary factor influencing the Pound Euro exchange rate will likely be the Bank of England’s (BoE) upcoming interest rate decision.
While a 25-basis point interest rate cut is widely anticipated, any dovish forward guidance from the BoE could weaken the Pound.
On the Euro front, two significant data releases could inject fresh volatility into the single currency as the week draws to a close.
Germany’s latest factory orders and the Eurozone’s retail sales figures have the potential to impact EUR exchange rates on Thursday, particularly if the results deviate from market expectations.
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TAGS: Pound Euro Forecasts
