GBP/EUR Exchange Rate Holds Steady as French GDP Misses
UPDATE: The Pound Sterling to Euro (GBP/EUR) exchange rate looks to close this week’s session higher as some weaker-than-expected growth in France helped prevent a possible fall in Sterling due to new Brexit uncertainty.
The Euro remains range bound today as France’s latest GDP estimate saw domestic growth hold at 0.2% in the second quarter, falling behind expectations of 0.3% growth.
#France #GDP Growth Rate QoQ 1st Est at 0.2% https://t.co/YZQGQp1rmQ pic.twitter.com/Gnye3TdzoL
— TRADING ECONOMICS (@tEconomics) July 27, 2018
The helped to offset a potential drop in the Pound exchange rate after the EU’s chief negotiator Michel Barnier ruled out Theresa May’s post-Brexit customs proposals.
GBP/EUR Exchange Rate Remains Flat as ECB Signals no Changes to Policy
UPDATE: The Pound Sterling to Euro (GBP/EUR) exchange rate continues to trend narrowly this afternoon as the European Central Bank (ECB) offered no surprises at its latest policy meeting.
As expected, the bank voted to leave interest rates on hold at 0% this month, leaving borrowing costs at a record low and resulting in the Euro remaining broadly flat.
A speech from ECB President Mario Draghi, may prompt some response in the EUR exchange rate a little later however, with investors looking for some clarification of the bank’s pledge to leave rates on hold until next summer.
GBP/EUR Exchange Rate Holds Steady on Positive EU-US Trade Talks
The Pound Sterling to Euro (GBP/EUR) exchange rate is trading in a narrow range this morning as the pairing fell back from a weekly high yesterday evening in the wake of trade talks between the EU and US.
At the time of writing the GBP/EUR exchange rate is broadly flat as the Euro holds onto the ground gained in the wake of yesterday’s positive trade talks.
Euro (EUR) Exchange Rate Buoyed by Trade Optimism
The Euro (EUR) exchange rate is on a stable footing this morning, thanks to some positive progress in trade talks between the EU and US on Wednesday.
EUR initially stumbled yesterday as markets remained nervous ahead of a meeting between, US President Donald Trump and European Commission President Jean-Claude Juncker, especially in the wake of some aggressive tweets from Trump.
However the Euro was able the recoup this loss later in the evening as Trump and Juncker emerged from their talks, announcing that they had agreed to work together towards removing trade barriers, easing fears of a potential trade war.
However with details still thin on the ground not everyone has confidence that the trade deal will amount to much, after all as Holger Schmieding of Berenberg Bank reminds us, Trump isn’t ‘exactly known for consistency’.
Today’s trade detente between the US and EU is being widely welcomed, but it has its limits. In the words of @philipilevy: “It looks a lot like deals struck with China last year, which of course were a prelude to a full-blown trade war.”
Our take: https://t.co/gyC2PYcSWs
— Megan Cassella (@mmcassella) July 25, 2018
Pound Sterling (GBP) Exchange Rates Buoyed by BoE Rate Expectations
The Pound (GBP) continues to trade robustly this morning thanks to renewed confidence that the Bank of England (BoE) will raise interest rates next week.
Sterling saw heavy losses last week as this confidence was shaken by a run of soft UK data, with markets slashing their bets that the BoE would be willing to go through with a hike in such an unfavourable climate.
However with just a week to go and no communication from the bank to suggest otherwise it appears an August hike now looks inevitable, even for the BoE’s so-called ‘unreliable boyfriend’ Mark Carney.
GBP/EUR Exchange Rate Forecast: ECB Rate Decision to Dominate Movement in the Euro this Afternoon
Looking ahead, the main catalyst for movement in the Pound Euro (GBP/EUR) exchange rate for the rest of today’s session is likely to be the European Central Bank’s latest rate decision.
No changes to monetary policy are expected as a result of this month’s meeting, but EUR investors will be looking to the bank to expand on its plans to wind up its stimulus programme by the end of the year.
A lot of focus is also likely to be placed on Mario Draghi’s comments in the following press conference, with traders eager to learn if the recent trade talks between the EU and the EU will have any bearing on the ECB President’s outlook for interest rates.
Meanwhile the remainder of the week may see the Pound (GBP) exchange rate show only limited movement, with expectations of an imminent rate hike from the BoE likely see the currency largely rangebound.