- Pound (GBP) steady ahead of BoE meeting on Thursday
- UK PSNB falls but interest payments rise
- Euro (EUR) lacks direction
- Eurozone consumer confidence due
The Pound Euro (GBP/EUR) exchange rate is treading water on Wednesday for a second straight session. The pair settled flat on Tuesday at €1.1647 after failing to hold onto earlier highs of €1.1679. At 05:45 UTC, GBP/EUR trades +0.02% at €1.1649.
The Pound traded in a mixed fashion in the previous session as investors digested a mixed batch of data. According to the Office of National Statistics, the public sector net debt fell by £5.5 billion in August compared to a year earlier. However, the date also revealed that the government was paying a higher than expected £2.9 billion to service the debt.
Separately, the Confederation of British Industry revealed that manufacturers reported rising new order. However, global supply chain problems and labour shortages have held back growth output. Whilst the survey’s gauge of price expectations had eased, surging energy prices are still expected given the energy crisis.
There is no high impacting UK data due to be released today. Investors will now look ahead to the Bank of England’s monetary policy announcement on Thursday. The central bank is not expected to adjust policy and could well adopt a wait and see approach as the furlough scheme winds up and after UK GDP unexpectedly slowed in July.
The Euro struggled for direction on Tuesday amid a lack of fresh catalysts and with the German elections looming at the end of the week.
Today attention will shift to the Eurozone consumer confidence print. Consumer confidence declined in August amid growing concerns over the spread of the Delta variant and rising prices. Even so sentiment edged down to -5.3 but still remained above its pre-pandemic level. Expectations are that consumer morale ticked lower again in September to -5.8.This would mark the third straight fall in consumer confidence. It’s worth pointing out that the reading is always negative.