GBP/EUR Exchange Rate Rangebound as Brexit Concerns Weigh
The Pound Sterling to Euro (GBP/EUR) exchange rate is trading in a narrow range this morning as ongoing Brexit uncertainty continues to limit the appeal of the UK currency.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1582, virtually unchanged from this morning’s opening rate.
Pound (GBP) Sidelined by Brexit Pessimism
The Pound (GBP) is struggling to find momentum against the Euro (EUR) and the majority of its other peers this morning as Brexit pessimism continues to undermine Sterling sentiment.
This comes as the ongoing deadlock in cross-party talks continues to frustrate GBP investors, with reports suggesting that neither the Conservatives nor Labour appear willing to budge regarding the issue of the a future customs union with the EU.
This has quashed hopes that the Easter recess would have helped to reinvigorate talks and has led some analysts to suggest that the talks will ultimately break down without a deal being agreed.
Further pressuring GBP exchange rates are the questions that continue to hang over Theresa May’s premiership, as backbenchers continue to push for the PM to step down.
Euro (EUR) Subdued Ahead of Spanish Elections
The Euro (EUR) meanwhile closes this week’s session subdued as markets brace for the Spanish elections taking place over the weekend.
This will be the third election in just four years, and could dampen EUR exchange rates as it heaps fresh political uncertainty on the Eurozone’s fourth largest economy.
Recent polls suggest that there could be a big shift in the political landscape this year, with a surge in support for the right-wing Vox party potentially unbalancing the distribution of seats.
This could make it difficult for the incumbent PSOE party to create another left-wing coalition government, potentially leading to another election down the road and casting further uncertainty over the Euro.
GBP/EUR Exchange Rate Forecast: Will Eurozone GDP Figures Hurt the Euro?
Looking ahead to next week’s session, the main catalyst for movement in the Pound Euro (GBP/EUR) exchange rate is likely to be the publication of the Eurozone’s latest GDP figures.
This could result in the Euro being put on the defensive next week as – in light of the gloomy data emerging from the bloc in recent months – some economists forecast growth will have slowed to just 0.1% in the first quarter.
Meanwhile, barring any major Brexit developments, the focus for GBP investors next week is likely to be on the Bank of England’s (BoE) rate decision on Thursday.
While the BoE is expected to signal that its monetary policy will remain frozen by Brexit uncertainty, we could see the Pound creep higher if the recent uptick in UK economic data results in a more upbeat outlook for growth.