- Pound (GBP) is unchanged in a quiet day
- UK elections are in focus after the leader’s debate
- Euro (EUR) is steady despite falling economic sentiment
- The French election’s first round is on 30th June
The Pound Euro (GBP/EUR) exchange rate is holding steady on Thursday after losses yesterday. The pair fell 0.19% in the previous session, settling on Wednesday at €1.1813 and trading in a range between €1.1812 and €1.1861. At 15:00 UTC, GBP/EUR trades -0.03% at €1.1810.
The pound is trading unchanged against the euro in a quiet day on the economic calendar.
With no fresh data to digest, the pound is looking ahead to next week’s elections. The Labour Party is still well ahead in the polls after last night’s leader’s debate and is expected to win by a large majority. A Labour win may help boost confidence and improve the stability in the country after conservative party infighting in recent years.
However, given the country’s economic position and pledges made during the election campaign, any large-scale fiscal policy is unlikely in the near term.
The Bank of England may have more impact on sterling than the elections.
The market considers that the Bank of England may cut interest rates as soon as August, which could prevent any meaningful gains in the pound.
The euro is unchanged as investors digest the latest economic sentiment data from the region and, of course, prepare for the French elections, the first round of which is this weekend.
The market and the euro have struggled since Macron called a snap election at the start of June. The far-right National Rally is expected to win, and the market is nervous about what this might mean for fiscal spending and French debt levels.
Meanwhile, on the data front, eurozone economic sentiment unexpectedly fell in June to 95.9, down from 96.
The data comes after weaker data from Germany this week. German confidence and business climate index unexpectedly deteriorated in the eurozone’s largest economy, raising concerns that the country is struggling to recover.
