The Pound to Euro exchange rate traded in a wide range again last week as Brexit headlines came thick and fast and Eurozone data provided cause for concern.
Last Week: Sterling Fluctuates as Brexit Saga Rolls On
GBP investors were kept on their toes again last week as the latest Brexit developments resulted in some dramatic swings in the Pound.
Sterling sustained heavy losses through the first half of the week as markets were left disappointed by Theresa May’s decision to only seek a short Brexit extension from the EU.
The Pound was able to roar higher in the second half of the session however as GBP investors expressed relief after the EU granted the UK a Brexit delay.
Meanwhile, after recording some strong gains during the first half of the week, the Euro came crashing back down to earth on Friday as the release of the Eurozone’s latest PMI figures sparked further concerns over the state of the bloc’s economy after growth in its manufacturing sector contracted sharply.
Three Things to Watch out for This Week
- Brexit Vote?
The big event this week (should it go ahead) will be a third vote on Theresa May’s Brexit deal. The Pound could stumble if it is rejected once more.
- Political Fallout
If the vote on the Brexit deal doesn’t take place the focus will be on what comes next, with a series of indicatives votes on Brexit, or the potential resignation of the PM likely to drive volatility in Sterling.
- German Data
This week will see the release of a slew of German economic data, including inflation, retail sales and employment figures, with the Euro likely to stumble if there are further signs that Germany’s economy is slowing.
GBP/EUR Exchange Rate Outlook
Brexit headlines will continue to dominate the GBP/EUR exchange rate outlook this week. Any positive developments could propel GBP/EUR to new highs, but if the odds of a no-deal Brexit rise the Pound could fall against the single currency over the course of the week.