Pound Steady as German Election Fallout Weighs on Eurozone Growth
The Pound to Euro exchange rate has remained steady despite the 'disastrous' results from Germany's latest local elections, according to Exchange Rates UK. The GBP/EUR rate was trading at around €1.1657 on Monday, virtually unchanged from the start of the session.
The Eurozone's largest economy is facing uncertainty following the CDU's losses in both Berlin and Mecklenburg-Western Pomerania, with Chancellor Friedrich Merz describing the outcome as a disaster but vowing to remain in his role. However, EUR investors are less optimistic about Merz's chances for survival.
The Pound was broadly flat on Monday due to a lack of major UK economic releases and limited policy speculation following the Bank of England's interest rate decision. Some GBP investors were cautious ahead of Prime Minister Andy Burnham's first face-to-face meeting with US President Donald Trump, amid concerns about Burnham's previous criticism of Trump.
The next major catalyst for movement in the Pound Euro exchange rate will be the publication of the latest UK and Eurozone PMIs on Wednesday. The Eurozone releases are expected to report a steady expansion in private sector activity, while the UK's PMIs forecast a moderation in private sector activity this month.