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Brexit Approaches, but GBP/EUR and GBP/USD Exchange Rates Rise

The Pound Euro exchange rate opened the week trading in a slightly stronger position, with Sterling also rallying by 0.8% against the US Dollar. This comes ahead of a historic moment for the UK, as the activation of Article 50 approaches.

  • GBP EUR rate rises to 1.15 – GBP USD rallies to 1.25
  • Pound advances amid US market uncertainty – Surveys show economic sector confidence
  • Euro stable ahead of ECB speeches – German confidence scores beat forecasts
  • US Dollar crashes after Trump healthcare defeat – Fears grow about Trump’s ability to deliver

Despite the overhanging threat of a Brexit-induced crash, the Pound has been in high demand today.

Minor GBP support has come from surveys by the Confederation of British Industry (CBI) and PricewaterhouseCoopers; these have shown growing optimism in the economy despite Brexit uncertainties.

Few notable UK data releases are due over today and Tuesday, leaving the Article 50 trigger on Wednesday as the biggest source of potential GBP movement.

The Pound could decline dramatically on the news, undoing the recent GBP/EUR and GBP/USD gains.

The Euro Pound exchange rate has recorded minor losses today, but the common currency rose by 0.7% against the weakened US Dollar. In the latter case, the EUR USD exchange rate of 1.08 is the best since mid-November 2016.

The main Euro-boosting data today has been Ifo confidence scores for Germany, which have all exceeded forecasts. Crucially, March’s business climate figure has risen above forecasts along with business expectations.

Today will bring a spate of potentially impactful European Central Bank (ECB) speeches, coming from officials Daniele Nouy, Sabine Lautenschlaeger and Peter Praet. If these policymakers are confident about the Eurozone in the near-term then further Euro gains could be in store.

The US Dollar has been one of the worst-performing major currencies today, dropping by over -0.6% against the Euro and the Pound.

This follows the events of last Friday, where a vote to pass Donald Trump’s healthcare replacement was called off due to a lack of support.

The news that ‘Trumpcare’ was off the table sent the US Dollar tumbling, mainly because of the implications.

As one of Trump’s most mentioned and widely-promoted policies during his presidential campaign, its defeat in the House of Representatives could be the first of many rejections.

If it looks like Trump’s plans will be blocked at every turn, then further US Dollar losses are likely due to eroding confidence in the new presidency.

A pair of Federal Reserve speeches are due today from voting members Charles Evans and Robert Kaplan.

If both officials are optimistic of an interest rate hike in the near term, then the US Dollar could stage a small recovery against the Pound and Euro.

Current GBP EUR USD Interbank Exchange Rates

At the time of writing, the Pound to Euro (GBP EUR) exchange rate was trading at 1.15 and the Euro to Pound (EUR GBP) exchange rate was trading at 0.86.