GBP/EUR Exchange Rate Muted as Brexit in Focus
The Pound Sterling to Euro (GBP/EUR) exchange rate appears range bound this morning as investors reflect on the comments made by officials following the latest round of Brexit negotiations.
At the time of writing the GBP/EUR exchange rate is virtually unchanged from its opening levels today, leaving the pairing trading close to the week’s starting rate.
Pound Sterling (GBP) Stable Following Brexit Press Conference
The Pound (GBP) is trading narrowly against the Euro (EUR) and the majority of its other peers this morning as markets mull over remarks made by Brexit Secretary Dominic Raab and EU negotiator Michel Barnier on Tuesday evening.
In a joint press conference, following the latest round of Brexit negotiations in Brussels the pair discussed the current state of talks, but offered little to suggest whether any real progress was being made.
Instead GBP investors have been left to chew over Barnier warning that the EU is ‘not aiming for a ‘no deal’ scenario but we are prepared for it’ while attempted to calm market nerves by suggesting he is ‘confident that we can reach a deal in October’.
Euro (EUR) Exchange Rates Muted Following Reuters Poll
Meanwhile the Euro (EUR) appears to be treading water this morning as economists in a Reuters poll forecast that the Eurozone is likely to experience limited growth this year.
After showing stellar growth in 2017, the Eurozone appears to have run out of steam at the start of this year a trend which looks set to continue for the remainder of 2018 according to the poll.
Economists are quick to point the finger at the recent global trade tensions as the main cause behind this gloomy outlook.
While some trade talks between President Trump and European Union chief executive Jean-Claude Juncker may have resulted in some positive steps, analysts remain wary, something which is dragging on the Euro this morning.
Bert Colijn, senior Eurozone economist at ING, said:
‘For the moment it seems that the Trump-Juncker meeting has cleared the air somewhat between the U.S. and Europe. We can’t discount the trade war flaring up again in the second half of the year … it could be that it will have more of an impact’
GBP/EUR Exchange Rate Forecast: Subdued Eurozone PMIs to Drag on the Euro?
Looking ahead to the second half of the week, the Pound Euro (GBP/EUR) exchange rate may trend higher on Thursday following the publication of the Eurozone’s latest PMI figures.
Economists forecast that the Eurozone PMI’s will show that private sector growth remained largely unchanged in August, adding to concerns that the blocs third quarter GDP may disappoint and likely dragging on the Euro (EUR).
Meanwhile on the data front the Pound (GBP) could struggle with the release of the Confederation of British Industry’s (CBI) distribute trade index, with expectations that the survey will reveal a slowdown in UK retail activity in August.