- 2017 British Pound Euro Exchange Rate Above 1.17 – But slips on Friday
- UK Business Optimism Beats Expectations – Surges in January according to CBI survey
- UK Growth Stats Impress – But fears remain that UK services could be hit by Pound
- EUR Forecast: German CPI Ahead – Monday to be key for Eurozone data
2017 British Pound Euro Exchange Rate Falls from Highs on Friday
The 2017 British Pound Euro exchange rate continued to fall throughout Friday’s European session and by the end of the day had almost dropped as low as 1.16.
Demand for the Euro improved thanks to weakness in the Pound and the US Dollar, despite the morning’s French and Italian confidence reports doing little to bolster demand for the shared currency.
UK markets sold off the Pound in profit-taking ahead of the end of the week’s European session. It’s expected that traders will be reacting to May and Trump’s meeting when markets reopen on Monday.
[Previously updated 12:55 GMT 27/01/2017]
Due to a lack of fresh domestic data as well as increased anxiety about this weekend’s meeting between UK Prime Minister Theresa May and US President Donald Trump, the 2017 British Pound Euro exchange rate slipped on Friday.
The pair fell over -0.4% from the weekly highs seen on Thursday, but remained comfortably above the level of 1.17.
On Thursday night, May arrived in the US and made a speech to Republicans in Philadelphia. During her speech, while she praised the Republican party, she scarcely mentioned Trump by name and continuously focused heavily on the importance of NATO.
As Trump has been a vocal critic of NATO, May’s insistence on its importance caused market anxiety that the two may clash when they meet.
[Previously updated 16:20 GMT 26/01/2017]
2017 British Pound Euro Exchange Rate Recovers Despite UK GDP Concerns
After slipping in the middle of the day, the 2017 British Pound Euro exchange rate advanced again towards the end of Thursday’s session as the Euro weakened.
A stronger US Dollar, as well as concerns around the future of the Euro project and US-EU relations under the Trump administration left the shared currency weaker on Thursday evening.
The day’s Eurozone ecostats did little to improve demand for the Euro. GfK’s German consumer confidence results improved from 9.9 to 10.2 and Spanish unemployment improved from 18.91% to 18.63%.
Strong GBP EUR movement is unlikely on Friday. A lack of influential domestic data means the pair is likely to simply firm throughout the day as GBP investors look forward to Theresa May’s upcoming meeting with Trump.
[Previously updated 12:48 GMT 26/01/2017]
Following its strong performance on Wednesday, the 2017 British Pound Euro exchange rate slipped slightly around the middle of Thursday’s European session.
GBP EUR had neared the key level of 1.18 for the first time since the first week of January, but following the publication of Britain’s Q4 2016 Gross Domestic Product (GDP) results Sterling slipped slightly from its best levels.
While UK growth actually beat expectations in Q4 and held its ground at 0.6% quarter-on-quarter and 2.2% year-on-year, investors became concerned that the UK services sector was seemingly propping up the majority of the country’s growth.
Analysts have pointed out that growth is highly imbalanced. Concerns that the value of the Pound would soon be hitting retail spending left traders concerned that growth could slump in 2017. As a result, GBP demand was dampened on Thursday.
[Published 06:00 GMT 26/01/2017]
The 2017 British Pound Euro exchange rate continued to edge higher on Wednesday after recovering from Tuesday’s Supreme Court jitters. A lack of fresh supportive factors for the Euro allowed a stronger Pound to easily register gains.
GBP EUR has gained over a cent this week so far. The pair began the week at 1.15 but now comfortably trends above the level of 1.16.
Pound (GBP) Advances on Supreme Court Relief and Brexit White Paper Anticipation
The Pound has advanced this week as confidence over Brexit improves once more, with markets finally getting a clearer picture of how the process will begin and who will have a say in what angle negotiations will take.
This week saw UK Supreme Court judges uphold the High Court ruling that Article 50 must be activated via Parliament rather than independently by the UK government.
While concerns remain that Scotland will move towards a second Scottish independence referendum without input on Brexit terms, the Pound has generally benefitted from the news as traders hope for MPs to amend the Brexit trigger bill.
According to Marc Ostwald from ADM Investor Services;
‘For all the furore (aka political windbagging) around yesterday’s UK Constitutional Court ruling, the only real question is how “tight” the wording of the Act of Parliament (to trigger Article 50) will be. The trick to stopping opponents tagging on conditions would be to make the Act very short, say as little as one paragraph, which would then make it very difficult to change as the rules state that “amendments must be ruled to be within the scope of the original text”.’
Investors were also excited during Wednesday’s session by confirmation from UK Prime Minister Theresa May that the government would publish a ‘white paper’ Brexit plan in response to Parliamentary pressure.
Euro (EUR) Slips on Lack of Fresh Supportive Factors
Sterling was able to easily advance against a relatively limp Euro on Wednesday as this week’s Eurozone data has not been enough to strengthen support for the single currency.
Tuesday’s Eurozone flash PMIs for January fell short of expectations, with services and composite prints dropping in Germany and the Eurozone as a whole according to the Markit prints.
While German Manufacturing beat expectations, improving from 55.6 to 56.5 despite being predicted to slip, the overall results did little to improve Euro demand.
The data published on Wednesday was also disappointing. The IFO published its January business sentiment surveys for Germany, which came in below expectations.
Business climate slipped from 111 to 109.8 and expectations dropped from 105.5 to 103.2. Current conditions met projections and printed at 116.9.
2017 British Pound Euro Forecast: UK Q4 Growth Results in Focus
Thursday’s session will be a vital one for this week’s GBP trade, as Britain’s Q4 2016 Gross Domestic Product (GDP) results will be published.
Analysts generally expect growth to have slowed at the end of last year, with forecasters projecting UK GDP will slip from 0.6% to 0.5% quarter-on-quarter and from 2.2% to 2.1% year-on-year.
If these figures beat expectations however, demand for the Pound could remain strong in the latter half of the week.
Other UK data still on its way this week includes BBA’s December mortgage approvals results, but otherwise the UK economic calendar is relatively quiet and GBP traders will instead be anticipating the publication of the UK government’s Brexit white paper.
Things will also be relatively quiet in terms of Eurozone data for the remainder of the week.
Thursday will see the publication of GfK’s German consumer confidence survey for February, as well as Spanish unemployment results and Italian retail sales. French and Italian consumer confidence results will be published on Friday.
The Euro is unlikely to see a huge increase in demand by the end of the week due to the relatively low influence of incoming datasets. As a result, the 2017 British Pound Euro exchange rate is likely to register another week of gains by the weekend.