December 19, 2024 – Written by David Woodsmith
STORY LINK Pound Euro Exchange Rate News: GBP/EUR Flat following CPI Releases
The Pound Euro (GBP/EUR) exchange rate was mostly muted on Wednesday following the release of the UK’s and the Eurozone’s latest inflation readings.
On Wednesday, the Pound (GBP) held steady following the release of the UK’s latest consumer price index (CPI) figures.
The headline inflation rate for November ticked up from 2.3% to 2.6%, and core inflation saw a similar rise, moving from 3.3% to 3.5%.
Although these numbers suggest a lower chance of an interest rate cut by the Bank of England just a day before its December meeting, the currency did not see much movement or attention after the data was made public.
The ONS’s Chief Economist, Grant Fitzner, commented: ‘Inflation rose again this month as prices of motor fuel and clothing increased this year but fell a year ago. This was partially offset by air fares, which traditionally dip at this time of year, but saw their largest drop in November since records began at the start of the century.’
Much like the Pound, the Euro (EUR) showed little reaction to the release of the Eurozone’s finalised inflation figures for November.
The headline inflation rate for the Eurozone increased from 2% to 2.2%, while core inflation remained unchanged at 2.7%.
Despite the inflation data surpassing forecasts, the Euro did not gain significant traction and also stayed largely flat following the announcement.
Looking ahead, the main factor likely to influence the Pound-Euro exchange rate on Wednesday will be the Bank of England’s (BoE) upcoming interest rate decision.
Economists predict that the central bank will maintain interest rates at their current level during the December meeting.
The market will be paying close attention to the BoE’s forward guidance for any signals about future monetary policy.
If the BoE adopts a dovish stance, the Pound could weaken following Thursday’s announcement.
On the Euro side, Germany is set to release its latest GfK consumer confidence index for January. If the data remains at its current low, it could put downward pressure on the common currency.
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TAGS: Pound Euro Forecasts
