The Euro has advanced against the Pound today, following a positive result for Eurozone-wide confidence figures.
- EUR GBP trading hits 0.85 – GBP EUR rate drops to 1.17
- Euro Pound rate advances on climbing confidence – Unchanged business confidence figure fails to undermine Euro
- Pound weakens on talks of bitter economic struggle after Brexit – Is the City of London under threat?
- Euro movement tied to German inflation figures – Pound shifts likely on PM’s meeting today
The Pound has been in low demand so far today, owing to a lack of direct data being compounded by rising concerns about the UK’s future economic relationship with its EU neighbours.
Euro Pound Gains Witnessed after Confidence and Sentiment Climb in January
The Euro has begun trading this week on a stable footing, having climbed against the Pound after January’s Eurozone confidence figures were announced.
The results have shown a rise in economic sentiment, consumer confidence, industrial sentiment and services sentiment.
The only static result has been business confidence, which stayed stable on 0.77 points.
Other Eurozone news has shown Spanish Q4 GDP growth rates slow on the year and remain unchanged on the quarter.
Pound Euro Exchange Rate Worsens after Warnings of UK-EU Trade Clash
Trading has opened poorly for the Pound Euro exchange rate today, with Sterling dropping by around -0.2%.
With no direct UK ecostats to refer to, investors have instead been unsettled by warnings of an economic ‘cold war’ developing between the UK and the EU, which is likely to be detrimental for both economies.
Offering a gloomy outlook, Italian Deputy Foreign Minister Mario Giro has forecast that;
‘We are hearing more and more that there are people, economic interests, who are thinking they can inherit some economic position, thinking that they can take away from the UK some of the position of the City of London. Not Italy, of course, because we are not in that position. And this will be an economic war. Let’s say an economic cold war, and we are not in favour of it.’
Future EUR GBP Forecast: German Inflation Stats and PM’s Meeting with Devolved Leaders Today
The next notable economic data out of the Eurozone will come in the early afternoon, when German inflation rate figures for January are expected. Forecasts are for the preliminary figures to show a drop on the month but a rise on the year, which could ultimately benefit the Euro due to annual results holding more weight than monthly recordings.
Following this will be Belgium’s GDP growth rate figures for Q4, which previously rose on the quarter and the year.
While no direct UK economic news is due out today, the Pound may still be moved by the outcome of talks between Theresa May and the devolved nation leaders in Cardiff today.
May is expected to be presented proposals by the Scottish and Welsh governments that would let them stay in the EU single market while the UK leaves it due to Brexit, but it remains to be seen whether these efforts will bear fruit.
If the meeting results in more animosity rather than unity among the UK nations, then the Pound could drop due to heightened uncertainty about the Brexit process.
Current Interbank EUR GBP Exchange Rates
At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.85 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.17 today.