GBP/EUR: Pound Steady vs. Euro As Angela Merkel Steps Down
  • Pound (GBP) slips lower in quiet trade
  • UK house price data due
  • Euro (EUR) rose after German factory orders unexpectedly jumped
  • Eurozone GDP, German ZEW economic sentiment & industrial production due

The Pound Euro (GBP/EUR) exchange rate is treading water on Tuesday after ticking a few pips lower in the previous session. The pair settled -0.06% lower in the previous session at €1.1659 in the middle of the daily traded range. At 05:45 UTC, GBP/EUR trades -0.01% at €1.1652.

The Euro pushed higher in the previous session after German factory orders unexpectedly rose in July. Boosted by overseas demand from the ship building sector, German factory orders jumped 3.4% month on month following a 4.6% rise in June. Analysts had been expecting a -0.7% decline. Whilst the data is solid, supply side disruptions continue to hold back manufacturing.

Attention will stay with the economic calendar. German industrial production is due to be released. Analysts are expecting production to rise by 0.7% month on month in July after contracting -1.3% in June.

Eurozone GDP will also be under the spotlight. This is the third estimate for the second quarter so it is not expected to be very market moving given that we are well into the third quarter.

More market moving could be the German ZEW economic sentiment reading for September. Analysts forecast that economic sentiment will decline to 30, down from 40.4. However the current situation is expected to improve to 33, up from 29.3 in August.

The Pound came under pressure at the start of the week as UK Prime Minister Boris Johnson remained locked in talks over how to fund social care reforms.

Lingering Brexit concerns continue to dampen demand for sterling. Brexit is being blamed for labor and food shortages across the UK. Separately but related, the British government has announced plans to extend the grace period over Northern Ireland’s post Brexit trading arrangements.

Today the UK economic calendar is once again light. House price data is the highlight of the UK data releases.

This week is quiet as a whole for UK data with Friday’s GDP release the only high impacting release due.