- EUR GBP Flat After Pound’s Advance – UK government may not be able to start ‘Brexit’ without parliamentary vote.
- US Dollar Rallies – Both currencies pressured by reinvigorated USD.
- Euro Paralysed by Mixed Data – November investor confidence rises while German factory orders disappoint.
- Euro Exchange Rate Forecast – Movement likely to be dictated by US election tomorrow.
The EUR GBP exchange rate has stagnated this morning following the Pound’s (GBP) advances late last week as both currencies are pressured by a resurgent US Dollar (USD).
Euro Pound (EUR GBP) at Lowest Levels since before Flash Crash
The Euro Pound (EUR GBP) exchange rate fell to its lowest point since before the flash crash in early October last week as market sentiment was improved by a British High Court ruling that the UK government would not be able to trigger Article 50 of the Lisbon Treaty without first winning a vote in parliament.
Sterling was strengthened further as the Bank of England (BoE) announced that it would not be making any additional cuts to the current record low interest rates as the British economy has performed better than expected since the Bank cut rates to 0.25% immediately following the ‘Brexit’ vote.
GBP EUR Stalemate as US Dollar (USD) Dictates Markets
The Euro (EUR) and the Pound (GBP) have both floundered this morning as markets were dominated by renewed confidence in the US Dollar (USD).
The ‘Greenback’ was boosted by the announcement that the FBI’s recent inquiry into Democratic presidential candidate Hillary Clinton had again cleared her of any wrongdoing in her use of a private email server whilst she was the US Secretary of State.
Both the Euro and the Pound made notable gains last week as traders fled the US Dollar as pressure from the FBI probe on Clinton’s campaign caused polls to narrow, leading investors to fear that a victory for her Republican rival Donald Trump was possible.
Slight Euro (EUR) Rate Movement Following Mixed Eurozone Ecostats
The Euro (EUR) has struggled to make any notable movement against the Pound (GBP) this morning as data published by the Eurozone was largely mixed.
The single currency faltered this morning following an unexpected drop in German factory orders as they plummeted to -0.6% in September, down from 0.9% the month before and significantly lower than expectations of 0.2%.
Meanwhile a positive increase in Eurozone investor confidence helped to balance this out as Sentix reported that confidence is at 13.1 for November, up from 8.5 the previous month.
These mixed messages were also reflected in the Eurozone’s October retail PMI reports, with Italy’s PMI rising from 45 to 46.5 while Germany’s and France’s dropped to 51 and 47.5 respectively.
EUR GBP Exchange Rate Forecast: US Elections to Rule Supreme
The EUR GBP exchange rate is likely to become increasingly volatile ahead of American’s going to the polls tomorrow in one of the most divisive US elections in history. Investors are likely to remain dovish despite Clinton’s perceived lead on the off chance of a victory for economic wildcard Trump.
With no additional data set to be released today markets will begin to look towards tomorrow’s German industrial production reports. Euro (EUR) exchange rates are likely to fall if forecasts that German industrial figures will plummet from 2.5% to -0.2% are realised as investors fear that a perceived slowdown in the European economy will cause the European Central Bank (ECB) to extend its quantitative easing programme past March 2017.
Current Interbank Exchange Rates
At the time of writing the EUR/GBP exchange rate was trending around 0.89 and the GBP/EUR exchange rate was trending around 1.12.