- British Pound (GBP) Heads To 20-Month High
- BoE Governor Andrew Bailey to speak
- Euro (EUR) collapses as business confidence drops
- GFK data on German consumer confidence and GDP
The euro pound exchange rate (GBP / EUR) was higher on Thursday, extending the gains from the previous session. The pair stabilized 0.07% higher on Wednesday at € 1.1896 after hitting € 1.1926 earlier in the session, just below the 20-month high of € 1.1938 reached earlier in the session. the week. At 5:45 am UTC, the GBP / EUR is trading + 0.04% at € 1.1901.
The euro slipped in the previous session after data revealed German business sentiment continued to decline in November. The closely watched gauge fell to 96.6, from 97.7 in its fifth consecutive monthly decline.
Sentiment was affected by supply chain bottlenecks and rising costs even before the fourth wave of COVUD really hit Germany. The data is retrospective. However, the upsurge in COVID infections and the impact they could have on the economy are of growing concern if more restrictions are introduced.
Today, the focus remains very much on the economic calendar with the release of German GDP and GFK consumer confidence data. Third quarter GDP data is the final reading which means it is quite out of date. However, GFK’s consumer confidence is on December. Consumer confidence is expected to fall to -0.5 next month, from 0.9 in November, reflecting these concerns over COVID. A weak reading could cause the euro to fall.
The pound gained ground against the euro but fell against the US dollar. The pound found some support in hawkish comments from Bank of England policymaker Silvana Tenreyo. A well-known dove, Tenreyo was slightly more hawkish when she said she was considering a rate hike in the medium term.
Today is another calm day on the UK economic calendar. Attention will be drawn to a speech by the BoE governor later today. Andrew Bailey has been accused of straying from the market in recent weeks after appearing to want to cut rates in November, which never happened.