GBP/EUR Exchange Rate Movement Limited by Government’s Emergency Planning
UPDATE: The Pound Euro exchange rate has made little movement today, remaining near its worst levels for the week so far.
This decline in value has not been helped by the news that the government is gearing up for a potential no-deal Brexit.
The government will reportedly start planning for leaving the EU without a deal in November, although negotiations with the EU are still ongoing.
Today’s limited GBP movement is something of a repeat incident, with even the suggestion that a no-deal Brexit is possible unsettling Pound traders and limiting overall movement.
GBP/EUR Exchange Rate Steady as ECB Touches on Brexit, Italy and Interest Rates
UPDATE: The Pound Euro exchange rate has seen minimal movement today, following the latest European Central Bank (ECB) monetary policy meeting.
ECB officials left interest rates at 0% as expected, but ECB President Mario Draghi made a number of remarks about Brexit and the Italian budget.
In the former case, Mr Draghi stressed that securing a workable Brexit agreement is crucial, otherwise this risks ‘financial uneasiness’.
Beyond unsettling GBP traders, this statement has put further pressure on UK and EU negotiators to secure a functional Brexit deal.
Mentioning Italy’s budgetary problems, Mr Draghi has remained optimistic and expressed his confidence in an eventual agreement on the nation’s spending plans.
GBP/EUR Exchange Rate Steady before ECB Interest Rate Decision
UPDATE: The Pound Euro exchange rate has made very little movement today since the morning, with currency traders remaining on standby for the afternoon’s European Central Bank (ECB) meeting.
ECB policymakers could boost the EUR/GBP exchange rate if they back a 2019 interest rate hike, although this isn’t an assured outcome from the event.
Signs of UK Government Stability Leave GBP/EUR Rate Unchanged
The Pound has traded in a narrow range against the Euro today, following the news that Prime Minister Theresa May has fought off a challenge to her leadership.
Despite this steady movement, the GBP/EUR exchange rate remains near the lowest level in October due to previous devaluation on Brexit concerns.
The PM met with backbench MPs of the 1922 Committee on Wednesday evening and by all accounts has convinced dissenters to back her Brexit blueprint.
There had previously been concern that the PM could face opposition from pro-Brexit MPs, who have taken issue with the suggestion of extending the Brexit transition period.
Euro to Pound Sterling (EUR/GBP) Exchange Rate Static on Falling German Optimism Stats
The Euro (EUR) has made little movement against the Pound (GBP) today, with the latest economic data failing to trigger single currency gains or losses.
On the plus side, the Q3 Spanish unemployment rate has fallen from 15.3% to 14.6%, below an expected 14.9% printing.
In some less supportive news, however, German economic confidence levels have also dropped. October’s Ifo readings showed a dip in business confidence, future expectations and perceptions of current conditions for Germany.
All three readings printed below forecasts, which has acted as a clear limiting factor on the EUR/GBP exchange rate.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast: Will ECB Meeting Raise Euro Demand?
The next important economic data will come from the Eurozone, when European Central Bank (ECB) policymakers meet to discuss monetary policy later today.
ECB officials aren’t expected to adjust interest rates from 0%, but a later press conference could still boost Euro demand.
All eyes are on ECB President Mario Draghi, who will be speaking. If Mr Draghi backs an interest rate hike in 2019 then the Euro could rise sharply against the Pound.
Additional support could come if Mr Draghi suggests that the ECB doesn’t foresee an Italy-EU relationship breakdown over the current budget issues.
The week’s last major Eurozone data will be Friday morning’s German consumer confidence measure, which is tipped to show a slight slowdown for the November reading.
A dip in consumer confidence wouldn’t be the end of the world, but such a result could still rattle EUR traders and cause a minor EUR/GBP exchange rate decline before the weekend.