Pound To Euro Rate Climbs As EZ PMIs Signal Economic Slowdown - Exchange Rates UK

The Pound Euro (GBP/EUR) exchange rate advanced on Friday following a combination of stronger-than-expected UK retail sales release and weak Eurozone PMI data.
Ahead of the weekend, GBP/EUR was trading at 1.16725, 0.32 percent up on the daily open.
Pound (GBP) Exchange Rates Mixed on Stronger UK Retail Sales
The Pound (GBP) saw a minor uptick in strength after ONS data revealed a slight rise in May's UK retail sales, indicating the extra bank holiday for the King's Coronation had a limited effect on the economy.
A 0.3% monthly sales increase, inclusive of fuel, balanced weaker food sales around the holiday with boosted online spending, credited to warmer weather.
The weather appears to be a crucial factor in recent sales volumes that have otherwise remained largely unchanged in real terms for several months.
Overall Pound (GBP) reaction was mixed with GBP/EUR trading at 1.16735 (+0.33%) and GBP/USD at 1.27122 (-0.27%) ahead of the weekend.
Euro (EUR) Exchange Rates Slide on Weak PMIs
Meanwhile, the Euro (EUR) displayed a weakening trend against several currencies on Friday, despite ongoing speculation regarding further tightening by the European Central Bank (ECB).
This downturn followed the release of June's private sector PMI flashes, signalling a potential economic slowdown in the Eurozone.
The results were weaker than predicted, which put pressure on the EUR complex. According to reports by Scotiabank;
French Services data fell to 48 (52.5 in May), pulling the Composite reading to 47.3 (from 51.2).German Manufacturing slumped to 41 (43.2 last) and the Composite reading dipped to 50.8 (from 53.9).
"The preliminary Eurozone Composite reading fell to 50.3 - suggesting growth is barely positive as interest rates start to bite," says Shaun Osborne, Chief FX Strategist at Scotiabank.
In response to these findings, there has been a noticeable shift in market sentiment towards the European Central Bank's (ECB) policy outlook.
Despite this, it is anticipated that the ECB will proceed with policy tightening in the coming month.
"Markets have tempered ECB expectations as a consequence but policymakers are still very likely to deliver on hikes in July at least," he adds.
Pound to Euro (GBP/EUR) Forecast: Pretty Light on Macroeconomic Data
Looking to next week, the Pound Euro exchange rate could see volatility with the release of Germany's Ifo business climate index, predicted to fall from 91.7 to 90.7.
While the German economy has consistently underperformed so far in 2023, a worsening market mood may drive investors toward the perceived safe haven of the Euro.
For the Pound (GBP), there are no significant data releases expected early next week, although Sterling may be subject to market dynamics and ongoing scrutiny of the Bank of England's recent rate hike.
The British Pound's performance will be influenced by market sentiment heading into the weekend due to an absence of fresh economic data.
As investors assimilate the week's developments, a robust economy and sustained speculation of rate hikes could bolster Sterling.
Further shifts in the Pound Euro (GBPEUR) exchange rate might also be spurred by statements from European Central Bank (ECB) policymakers.
If confidence dips, bullish remarks may uplift the Euro.
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