Pound euro exchange rate: GBP/EUR predicted to move lower as German economic data provides EUR impetus

It is a euro day today, and figures already out this morning have kicked off a potentially good start to the session for the euro.

Ahead of the release of German manufacturing data we see:

• The pound to euro exchange rate is 0.09 pct down on last night's close at 1.1843.
• The euro to pound exchange rate is therefore at 0.8443.

NB: The above quotes are wholesale market quotes, your bank will affix a discretionary spread when making a retail offer. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here.

German data underpins value of the euro

German trade balance exceeded expectations at 15.6bn and German Factory orders later this morning (11:00) could provide the euro with that extra boost.

"The euro is set to strengthen today, as German trade balance figures have already beaten estimates, while German Factory Orders are expected to show a 1.2% increase," says Sasha Nugent at Caxton FX.

Nugent goes on to say the pound sterling will likely be under some pressure today ahead of tomorrow’s manufacturing figures, and the market will not hesitate to favour the euro if German figures meet expectations.

US dollar remains pressured

Turning to the headline euro dollar exchange rate we see the US dollar remains under broad-based pressure today.

Currency market players are speculating that today a proposal will be put forward about a vote on Friday.

Presumably the reason should be that many moderate Republicans have been softened enough to vote for the Democratic proposal.

Hence they can avoid political and financial chaos.

Commenting on the currency implications of the ongoing political impasse in the US is Leander Dreyer at Jyske Bank:

"Overnight ministers from both China and Japan have voiced opinions to the effect that the US must get its act together and resolve the political deadlock.
"There is no doubt that from now on the US politicians will be under heavy pressure from many quarters. So far the financial market has been hesitant.

"We think that from now on risk appetite will fall and hence risk aversion will increase and the financial market will send a
clear signal to the US asking it to solve the problems. We expect that in respect of USD and the EM currencies there will be a moderate negative pressure until an agreement is reached or the US hits the debt ceiling."