GBP/EUR Exchange Rate Weakened by Trump Comments
UPDATE 2: The Pound Sterling to Euro (GBP/EUR) exchange rate is on the defensive this morning, after being hit by losses overnight in the wake of comments made by Donald Trump regarding the UK’s Brexit plan.
Sterling sentiment plunged as Trump suggested the proposals for a ‘soft’ Brexit ‘will probably kill’ any hopes of a free trade deal with the US.
The comments were a major blow to both Theresa May and the Pound, with markets fearing they will embolden opposition to her hard-fought proposals.
GBP/EUR Exchange Rate Improves as Government White Paper on Brexit is Released
UPDATE: The Pound Sterling to Euro (GBP/EUR) exchange rate is ticking higher this afternoon, with markets appearing to welcome the UK government’s Brexit whitepaper.
Sterling sentiment was buoyed as the paper detailed the government’s plans to retain free movement for skilled workers and students, while also seeking to ensure continued co-operation in trade.
Meanwhile the Euro (EUR) exchange rate came under pressure as trade war fears prompted the European Commission to lower its Eurozone growth expectations from 2.3% to 2.1%.
GBP/EUR Exchange Rate Muted as Brexit Blueprint in Focus
The Pound Sterling to Euro (GBP/EUR) exchange rate is trading in a narrow range this morning, as markets await the publication of the UK government’s Brexit whitepaper.
At the time of writing GBP/EUR is virtually unchanged from this morning’s opening levels, with the pairing having recovered from a slight dip during the Asian session.
Pound Sterling (GBP) Exchange Rate Subdued as Markets Await Brexit Paper
The Pound (GBP) is trending narrowly against the Euro (EUR) and the majority of its other peers such as the US Dollar (USD) this morning, with markets reluctant to make any moves ahead of the release of the UK government’s long-awaited Brexit whitepaper.
After being delayed by a number of months due to disagreements within the Cabinet, today will see Theresa May finally release a blueprint for the UK’s future relations with the EU, with GBP investors hoping it will grant some much needed clarity to the whole Brexit process.
This could see the Pound surge, especially if the government’s ‘comprehensive vision’ appears to move the UK towards a ‘soft’ Brexit.
However GBP investors are also likely to be wary of how the paper has deepened divisions in the Conservative party, with both Boris Johnson and David Davis having resigned from the cabinet earlier this week in protest over the proposals.
The EU’s response to the paper will also be a key measure for Sterling sentiment as well, with the GBP/EUR exchange rate likely to plunge should it get a lukewarm reception from the EU’s chief negotiator, Michel Barnier.
Euro (EUR) Exchange Rate Stable as Industrial Output Rebounds
Meanwhile the Euro (EUR) is firming this morning following the release of the Eurozone’s latest Industrial production figures.
According to data published by Eurostat, factory across the Eurozone sprung back to life in May, with industrial output growth rebounding from -0.9% to 1.3%.
This was slightly ahead of forecasts of 1.2% growth, but failed to prompt any major gains for the Euro, with analysts sceptical that today’s data will mark the start of a sustained upswing in production.
GBP/EUR Exchange Rate Forecast: Will Upcoming UK Data Support August Rate Hike?
Next week will see the UK publish its latest inflation and employment figures, with the data expected to have a considerable impact on the GBP/EUR exchange rate.
With the Bank of England (BoE) possibly planning to tighten its monetary policy next month, next week’s data may be the final key in the puzzle to whether the bank will deliver a rate hike in August, potentially leading the Pound (GBP) to soar.
In the meantime a lull in Eurozone economic data over the next week could limit movement in the Euro (EUR), with June’s final inflation reading on Wednesday unlikely to prompt any major reaction from EUR investors should it print in line with expectations.