- Pound (GBP) is falling after losses last week
- UK house price growth slows in October
- Euro (EUR) edges higher despite weak German data
- Eurozone trade balance is due
The Pound Euro (GBP/EUR) exchange rate is falling after losses last week. The pair fell -0.07% in the previous week, settling on Friday at €1.1549 and trading in a range between €1.1539 – €1.1606. At 09:35 UTC, GBP/EUR trades -0.05% at €1.1543. The pair is set to rise 0.08% across the week.
The pound is edging lower at the start of the week in a risk-off mood in the market as investors watch developments in the Middle East.
Concerns that the conflict between Israel and Hamas could escalate, drawing in bigger players in the Middle East is keeping risk sentiment on the back foot.
There is no high-impacting UK economic data today, so investors will digest the latest house price figures, which show that prices rose at the slowest pace for this time of year since 2008.
The average asking price for a home was 0.5% in October compared to the previous month well below the average for the period which is a 1.4% rise, according to Rightmove.
Weak house prices come after the Bank of England raised interest rates 14 times since December 2020 and August of this year before pausing rate hikes in September. Weak house prices can impact consumer confidence in the UK and don’t bode well for the economic outlook.
The euro is edging higher despite disappointing German wholesale prices, which fell by 4.1% year on year in September, marking the sixth straight monthly decline. The data points to a weak demand environment and easing price pressures, which point to lower inflation rates in Germany in the coming months.
Looking ahead, attention will now turn to the eurozone trade balance, which is expected to widen to 12.5 billion from 6.5 billion When it swung into a trade surplus after almost two years in deficit.
Also in focus will be European Central Bank president Christine Lagarde’s speech any comments surrounding the economic outlook and the potential future path for interest rates could influence the euro.
