EUR/GBP Exchange Rate Down despite Gove Warning that ‘Winter is Coming’ if May’s Deal Fails Vote
The Euro Pound Sterling (EUR/GBP) exchange rate is down today and is currently trading in the region of €0.8888 on the inter-bank market.
The Pound (GBP) has gained on the Euro despite the UK facing its Parliamentary vote on Brexit today.
With the outcome widely expected to be a rejection of Prime Minister Theresa May’s Brexit deal this evening, Pound traders have remained apprehensive.
Michael Gove, the UK’s Environmental Secretary, refused to share his expectations on tonight’s vote, but warned that ‘winter is coming’ unless May’s deal is successfully voted through. Gove also said:
‘The real danger is if people do not vote for the government this evening, we face either a no-deal Brexit, with the short-term economic damage that would bring, or worse: no Brexit at all.’
There is also increasing speculation that the Labour leader, Jeremy Corbyn, will table a motion of ‘no confidence’ in the Conservative government if Theresa May loses her Brexit vote this evening.
This could potentially instigate a general election unless a motion of confidence in the government is accepted within 14 days, which is leaving some Pound investors feeling skittish as political uncertainty mounts.
Euro investors are also apprehensive over on-going Brexit concerns, with mounting fears that the UK Parliament will reject May’s UK-EU withdrawal deal, which will in turn raise fears over a possible chaotic Brexit.
EUR/GBP Exchange Rate Slips as Euro Investors Await Draghi Speech after Signs of Slowing Eurozone Economy
Euro traders were left uninspired by today’s publication of France’s Consumer Price Index for December, which increased by 0.1%.
Today will also see the President of the European Central Bank, Mario Draghi, deliver a speech, and with it being his first appearance in 2019, Euro traders will be paying close attention to any dovish comments on the state of the Eurozone economy.
The Euro has continued to struggle today following yesterday’s poor industrial production figures, which showed a monthly decrease in November of -1.7% against October’s 0.1% – its biggest plunge in almost three years.
EUR/GBP Forecast: Sterling Could Plummet if Brexit Deal is Voted Down
GBP investors will be awaiting the outcome of tonight’s Brexit vote, and if, as is widely expected, May’s deal fails to be voted through, Sterling could potentially plummet against EUR as political uncertainty increases.
The Bank of England Governor, Mark Carney, will be delivering a speech tomorrow in the wake of today’s Brexit vote, and if he makes any alarming comments about the UK economy could see the Pound markedly fall.
Tomorrow will also see a raft of UK data releases, with the most significant being the publication of the yearly Consumer Price Index – any signs of an increase could benefit GBP.
These will be followed by the publication of the UK Retail Price Index figures for December which are, however, expected to increase.
The outcome of today’s Brexit vote, however, will likely determine the EUR/GBP exchange rate into the coming week.