Euro Dollar Trading Driven By French Parliamentary Elections and Federal Reserve
  • Pound (GBP) edges lower today
  • Concerns a hawkish BoE could trigger a recession
  • Euro (EUR) falls across the week
  • French elections this weekend

The Pound Euro (GBP/EUR) exchange rate is moving lower after four days of gains. The pair settled +0.21% higher on Thursday at €1.2016, after trading in a range between €1.1953 – €1.2030. At 09:45 UTC, GBP/EUR trades -0.11% at €1.2002. The pair is on track to gain 1.2% across the week.

The euro failed to push higher yesterday even after the latest European Central Bank meeting minutes were more hawkish. The minutes revealed that several policymakers were unnerved by record-high inflation and wanted to act immediately to tame rising prices.

The minutes also showed that some governing council members believed that the staff projections were underestimating where inflation was heading. While the Euro briefly gained following the release, it soon fell again.

Jitters over the French Election could also be weighing on the common currency. The first round of the Presidential election will take part this Sunday, with a second round on Sunday, 24th April. Macron is the favorite, but concerns that far-right candidate Marine Le Pen, Macron’s opponent in the 2017 election, is closing the gap in the polls is unnerving investors. Le Pen has previously been vocal in her desire to exit the euro.

The Pound is trending lower today. This week has been a relatively quiet week for the pound for data and Bank of England speakers.

Whilst the Pound has risen against the Euro, it trades at its lowest level since mid-March versus the US Dollar.

Whilst the UK is experiencing 30 year high levels of inflation, there are growing concerns over the BoE’s ability to raise interest rates without triggering a recession. These concerns are weighing on the value of sterling.

Next week GDP data will be in focus and will offer some clues as to how the UK economy is holding up.