- Euro Pound 2017 Exchange Rate at 0.87 – Returns to highs on Thursday evening
- Euro Lacks Fresh Supportive News – Sterling boosted by hopes of MP vote on Brexit
- European Central Bank Minutes Impress – Policymakers split on QE extension
- GBP Forecast: Markets Anticipate Supreme Court Decision – Brexit developments to influence GBP
Euro Pound 2017 Edges Higher Finishing Week of Gains
The Euro Pound 2017 exchange rate looked to register its best week of gains of the year so far on Friday afternoon as EUR GBP fluctuated near a weekly high of 0.87.
EUR GBP looked to lock in around a penny and a half throughout the week and the outlook for the coming week is on the upside too.
Analysts are expecting UK Prime Minister Theresa May’s comments during her Brexit speech next Tuesday will be seen as bearish by GBP investors which could cause the British currency some difficulty early in the week.
However, demand for the Euro may also be mixed if the European Central Bank (ECB) takes a notably cautious tone in its meeting next Thursday.
(Previously updated 12:42 GMT 13/01/2017)
Demand for the Euro Pound 2017 exchange rate flattened slightly on Friday and trended within a more tight region due to a lack of fresh influential factors in EUR GBP trade.
Sterling failed to recover from Thursday’s falls however, with EUR GBP spending most of Friday morning trending near its worst weekly levels within the region of 1.14.
The day’s only relevant ecostats were Germany’s December wholesale price index results which saw a solid improvement. The Euro outlook remained on the upside due to new optimism towards the ECB as well as a weaker US Dollar (USD).
(Previously updated 16:40 GMT 12/01/2017)
Euro Pound 2017 Exchange Rate Advances after ECB Minutes Report
The Euro Pound 2017 exchange rate headed higher on Thursday afternoon after trending flatly for most of the day, as the day’s publication of December’s European Central Bank (ECB) meeting minutes impressed traders.
The minutes revealed that although quantitative easing (QE) was extended in December, some policymakers were against the extension. This indicated to investors that the Eurozone outlook may be better than expected.
Demand for the Pound was also dampened on Thursday afternoon by news that the highly anticipated Brexit speech from UK Prime Minister Theresa May was due to be held this coming Tuesday. Investors are concerned that May will distance herself further from aiming for single market access, leaving GBP trade jittery.
(Previously updated 14:04 GMT 12/01/2017)
Little change could be noted in the Euro Pound 2017 exchange rate early on Thursday afternoon, as the exchange rate continued to fluctuate tightly in the same region seen on Wednesday afternoon.
With global markets shifting their focus to the US economy following a disappointing press conference from President-elect Donald Trump on Wednesday, EUR GBP was left relatively limp.
News that Germany’s 2016 growth had beaten expectations and a slightly more optimistic Bank of England (BoE) left the Euro to Pound exchange rate trending tightly, or lack thereof.
According to The Economic Times; ‘Europe’s largest economy is benefiting from rising consumption and increased state spending on refugees, compensating for a weaker contribution from trade and sluggish demand from major trading partners and emerging markets.’
(Previously updated 10:26 GMT 12/01/2017)
The Euro Pound 2017 exchange rate fluctuated with an upside bias throughout Wednesday’s European session as Sterling trade remained weak, although slightly stronger than earlier in the week.
EUR GBP spent most of Wednesday fluctuating relatively narrowly in the region of 0.86 after falling from Tuesday’s two-month-high of 0.87. The pair was still a cent up on the week’s opening levels.
But how will the pairing fare with the European Central Bank’s account of its monetary policy meeting looming? A dovish bias from the ECB would be sure to put the Euro under pressure and may help the Pound launch something of a rebound.
Also likely to impact the EUR GBP exchange rate is tomorrow’s German Wholesale Price Index and advance Retail Sales numbers from the US. UK data is in limited supply until next week so investors will be staying highly attuned to the latest Brexit developments.
During Thursday’s European session the Eurozone published industrial production figures for November. The data showed that industrial production increased by 1.5% on the month and 3.2% on the year, smashing forecasts for respective growth of 0.5% and 1.5%.
Euro (EUR) Falls Limp amid Lack of Fresh Supportive News
While Euro movement has improved in the last week, the shared currency lacked the momentum to perform strongly on Wednesday and only made limited gains.
This has been largely due to a lack of fresh supporting elements, with the Eurozone’s last influential publications coming in on Monday. The increased strength of the US Dollar also weighed on Euro demand on Wednesday.
Investors preferred the ‘safe haven’ US Dollar on Wednesday as the beginning of the highly uncertain Donald Trump US Presidency is just a week away.
Despite these concerns, many of the downside risks in Euro trade have been relieved in the past week as some analysts believe the risk of rising populism in the Eurozone is not as great as previously feared.
Analysts have also been generally optimistic on the continued recovery of the Eurozone despite a slower growth forecast for the bloc from The World Bank this week.
Many have also suggested that the higher US inflation outlook under the Trump administration could cause a ripple effect of higher inflation in other key economies too, Eurozone included.
Pound (GBP) Holds Away from Lows on Brexit MP Vote Hopes
After plummeting to multi-month lows against the Euro and other major currencies on Tuesday morning, the Pound continued its gradual recovery on Wednesday.
Sterling’s movement could have fared better if the day’s UK ecostats had all impressed. While economic activity such as manufacturing and industrial production figures all beat expectations in November’s newly published prints, the UK trade deficit figure left a lot to be desired.
November’s update to the UK trade balance was expected to fall to -£3.5 – already a damning figure. However, the final result was an even worse -£4.17b and analysts expect this will prompt government borrowing to only continue worsening in order to stave off Brexit damage in the coming years.
Despite the disappointing deficit news, Sterling was supported by news that the UK government was likely to lose its Supreme Court challenge.
According to a report from The Guardian, seven out of eleven Supreme Court judges are expected to uphold the High Court’s decision that the Brexit process must be activated through Parliament rather than just the UK government.
To investors, this increases hopes that the EU single market will become a key point of Brexit negotiations, as most Tory backbenchers and Labour MPs are expected to fight for single market access.
Euro Pound 2017 Exchange Rate Forecast: European Central Bank Minutes Due
Most of the week’s most influential UK datasets have been published already, leaving the Pound to react to developments in Brexit news and the UK Supreme Court case.
The Eurozone, on the other hand, will see the publication of a few more vital publications before the week is out. Germany’s full 2016 Gross Domestic Product (GDP) figure will be published and is predicted to have improved slightly from 1.7% to 1.8%.
The European Central Bank (ECB) will also publish the minutes of its December meeting, in which it extended its controversial quantitative easing (QE) package until December 2017.
Investors will be paying close attention for any further details on what the bank’s officials expect from the Trump administration as well as the possibility of a more hawkish 2017 outlook. However, a dovish tone would likely weaken the Euro.
EUR GBP traders will also increasingly react to the market’s risk-sentiment as the inauguration of Donald Trump as the next US President is due to take place on the 20th and is likely to see investors seeking out ‘safe haven’ currencies like the US Dollar.
The Euro Pound 2017 exchange rate is predicted to slip slightly towards the end of the week, but unless the Pound outlook improves the pair is still likely to end the week above opening levels.