- Single currency uncertain after weekend of unrest – EU Referendum results remain troubling
- Spanish election results in second deadlock – Political uncertainty results from outcome
- Pound Sterling remains on life support – Improvements seen since Friday
- Post-‘Brexit’ meetings due in Europe – Ongoing talks expected among EU leaders
The Euro has managed to make continued gains against the Pound today, thanks to ongoing negative influence from the EU Referendum result that came last week.
While the Euro Pound exchange rate advanced beyond 0.83, the Pound Euro exchange rate plummeted to a multi-year low of 1.19.
The Pound remains in a critical condition, although the UK currency is faring better today than at any time over the weekend.
Eurozone Economic News: Single Currency makes Uncertain Movement on Spanish Election Outcome
The Euro has opened the post-‘Brexit’ week on a note of instability, having risen by 0.2% against the Polish Zloty (EUR/PLN), 0.4% against the Australian Dollar (EUR/AUD) and 1.7% against the Pound (EUR/GBP), but fallen by -0.4% against the Indian Rupee (EUR/INR), -0.5% against the Swiss Franc (EUR/CHF) and -0.6% against the Japanese Yen (EUR/JPY).
The Euro’s tentative movements today are likely a symptom of continued fears for the unity of the European Union post-‘Brexit’, with the ultimate fate of the multinational union remaining in question.
Unity was missing over the weekend in Spain, where the second general election in around six months resulted in another deadlock, with no one party achieving a majority. Although the Unidos Podemos party had been painted as an anti-EU group, party leader Pablo Iglesias said in the wake of the election that:
‘We hope for a different Europe, we will fight for a Europe with social rights as a reality and we are for Europe and the people in Europe’.
Pound Sterling Rates Remain Unsettled after Osborne Comments
The Pound has continued to fall against its peers this week, although compared to the spectacular declines seen on Friday, the UK currency is actually performing better than before.
The day’s rates have seen declines of -1.4% against the Euro (GBP/EUR), -1.7% against the US Dollar (GBP/USD) and -2% against the Egyptian Pound (GBP/EGP).
Earlier on in the morning, Chancellor George Osborne made his first major appearance since the Referendum vote, stating that there would not be an emergency budget in the short term, and also that the UK’s economy was currently in a desirable condition.
Future EUR, GBP Forecast: Will Draghi Comment on ECB Response to ‘Brexit’ Fallout?
The rest of the day will bring announcements only from the Eurozone, with the most notable events coming from the European Central Bank (ECB) and EU leaders as a whole.
In the former case, ECB President Mario Draghi is expected to speak on monetary policy in Portugal. Although the policymaker is not explicitly expected to speak on the outcome of the Referendum, comments on this matter remain a distinct possibility.
Also taking place during the day will be a key meeting of European Union leaders, where assembled heads of the EU discuss how to facilitate a UK exit from the EU and how negotiations on this subject should play out.
Current EUR, GBP Exchange Rates
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.8241 and the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.2136 today.