EUR/GBP Exchange Rate Stall as UK Cabinet in Brexit Crisis Talks
The Euro Pound (EUR/GBP) exchange rate is struck in a neutral range this morning as Theresa May holds a Brexit crisis meeting with her cabinet.
At the time of writing, the EUR/GBP exchange rate is virtually unchanged this morning, leaving the pairing trading at £0.85.
Pound Sterling (GBP) Exchange Rates Subdued as May Faces Cabinet Showdown over Brexit
The Pound (GBP) is rangebound against the Euro (EUR) and the majority of its other peers this morning as Theresa May holds a lengthy five-hour crisis meeting with her cabinet.
With only 10 days left to go until the UK is set to leave the EU on 12 April, May finds herself in the unenviable position of trying to reconcile the two sides of her cabinet and attempt to find a solution to the current deadlock.
Complicating matters is that the government appears to have lost control of the Brexit process, with parliament holding its own series of indicative votes on in an effort by MPs to find a solution to Brexit.
However, Parliament remains just as divided, with MPs unable to agree to any of the four alternative options voted on yesterday, that resulted in the Pound trimming its gains earlier in the session.
GBP investors speculate that May and her cabinet may be considering putting the PM’s withdrawal deal back before Parliament, but given that it has already been rejected three times, the odds of it getting through remain slim.
This has led some observers to even speculate on the chances of May calling a general election, although given the potential downsides to this she is likely to be reluctant to opt for the nuclear option.
Euro (EUR) Exchange Rates Muted Followed Modest Rise in Producer Prices
Meanwhile the Euro (EUR) is also trading narrowly this morning following the release of the Eurozone’s latest PPI figures.
According to Eurostat, producer prices rose in line with expectations in February, with a modest rise of 0.1%.
However the figures also revealed that prices growth was revised down in January, offering little support to the Euro this morning.
EUR/GBP Exchange Rate Forecast:
Looking ahead to the remainder of this week, we can expect to see Brexit headlines continue to dominate movement in the Euro Pound (EUR/GBP) exchange rate throughout the session as events continue to unfold.
Outside of Brexit however we may see the release of the UK’s latest services PMI influence GBP exchange rates on Wednesday.
However it’s unlikely to prove positive for the Pound, with economists forecasting that growth in the UK’s all-important service sector will have slowed again in March, with the sector drifting dangerously close to the point of stagnation.
Meanwhile the focus for EUR investors in the mid-week will be the release of the Eurozone’s latest retail sales figures, with the Euro likely to stumble as analysts expect to see retail sales growth to have slowed sharply in February.