EUR/GBP Exchange Rate News: EUR Gains against Sterling on Continuing British Political Chaos
The EUR/GBP exchange rate is currently trading at £0.89, with focus still remaining on Brexit despite Italy’s lingering budget controversy.
And with lingering concerns of a vote of no-confidence in Theresa May over her Brexit plan, the Pound faces further volatility.
The EUR/GBP exchange rate looks to hinge upon further Brexit negotiations once again as both currencies await in a state of limbo.
EUR/GBP: Brexit Overshadows ECB Draghi’s Optimism despite Eurozone’s Recent Weakness
The President of the European Central Bank (ECB), Mario Draghi, delivered a speech this morning that hinted at softer levels of inflation, instilling confidence in the Eurozone economy and bolstering investor confidence in the Euro (EUR).
With the focus remaining on Brexit, however, Draghi left the Euro generally unmoved, although his speech contained signs of optimism:
‘If firms start to become more uncertain about the growth and inflation outlook, the squeeze on margins could prove more persistent. This would affect the speed with which underlying inflation picks up and therefore the inflation path that we expect to see in the quarters ahead.’
However, Brexit remains the main focus for many Euro investors today, with Italy’s budget controversy being overlooked for now and markets left waiting on the response from the European Commission.
GBP/EUR Exchange Rate Rallies despite Brexit Uncertainty
The Pound (GBP) may have benefited from Theresa May’s steadfastness over her EU divorce proposal, saying that she believes with ‘every fibre of my being’ that it is ‘the right one for our country’.
However, with a vote of no-confidence deemed increasingly likely, the Pound could further plummet, with Sky News sources warning in a recent Tweet:
Sky sources: All government whips have been told to cancel any engagements today and return to London as a source close to the whip's office says a no confidence vote in the Prime Minister is now "likely"
— Sky News Breaking (@SkyNewsBreak) November 16, 2018
Despite this, the Pound (GBP) could find strength if Theresa May’s insistence on the Brexit deal wins support from MPs, over the coming days.
Euro Pound Outlook: EUR/GBP Awaits Direction from Brexit Developments
Brexit is likely to remain the focal point for Euro investors for the week ahead..
The Euro Pound (EUR/GBP) exchange rate will nevertheless react to any decisions made by the European Commission over Italy’s controversial budget proposal, and this may dent the Euro’s strength in the coming week.
The EC is due to respond to Italy’s budget intransigence on Wednesday next week, so this is likely to be a decisive moment for the EUR/GBP exchange rate.