EUR/GBP Falls Back in Anticipation of Federal Reserve rate Decision
The Euro has slipped against the Pound today after showing some gains earlier in the session. Currently EUR/GBP is trading at a rate of £0.8914 on the inter-bank rate.
This comes ahead of the American Federal Reserve’s latest policy meeting this evening, with widespread expectations that it will raise interest rates to 2.25%.
Although a rate hike has largely been priced in by markets, any US Dollar strength is likely to bring down Euro rates, having a knock-on effect for EUR/GBP.
GBP/EUR Traders Eye Opposition Labour Party’s Brexit Stance
With speculation over Brexit remaining elevated, Tuesday’s Labour Party conference in Liverpool, saw a majority of delegates approve a second referendum vote if Parliament rejects Theresa May’s Brexit plan.
The broad consensus is that reversing the decision to leave the EU would be a politically disastrous move that could destroy trust in the UK government, so Labour’s vote has alarmed some traders.
The prospect of MPs rejecting Theresa May’s Brexit plans has also rattled GBP traders today, as among other issues this could make a no-deal Brexit more likely.
Eurozone Data Limited to French Consumer Sentiment
Today’s Eurozone data has been limited and generally unsupportive of the Euro, consisting of little more than a French consumer confidence reading for September.
The figure revealed that confidence had gone down from 96 points to 94, with any number below 100 indicating more pessimism than optimism.
This is the lowest level of confidence since April 2016 and went against forecasts of a rise to 97 points.
Any reading below 100 points means that pessimistic consumers are in the majority, so this data has been doubly negative but not enough to cause EUR/GBP exchange rate losses.
Euro Vulnerable as Confidence Data Expected to Disappoint
Looking to tomorrow, Thursday’s main Eurozone data will be in the form of a raft of data releases covering German and Eurozone-wide confidence levels.
Consumer confidence levels in Germany are expected to remain at a stable and sturdy 10.5 points, although across the wider Eurozone the expectations are for falling economic sentiment.
These confidence figures could have the greater impact on the Euro tomorrow, likely leading to a EUR/GBP exchange rate decline if they all print in line with expectations.
Apart from this scheduled data, EUR/GBP could also be influenced by speeches from European Central Bank (ECB) and Bank of England (BoE) officials, with the latter’s Monetary Policy Committee member Andy Haldane giving a speech at lunchtime.