Euro to Pound Exchange Rate Tumbling in Anticipation of Brexit Developments
While most of this week’s Eurozone data was optimistic so far, this morning’s stats fell notably short of expectations and played a part in knocking the Euro to Pound Sterling (EUR/GBP) exchange rate lower this week.
After seeing bearish movement for most of last week, EUR/GBP ultimately avoided losses and closed the week near the level of 0.8535.
This week so far, EUR/GBP is once again trending with a downside bias. It is avoiding last week’s lows but is still lower in the region of 0.8466 at the time of writing.
The Pound (GBP) is also benefitting from Brexit anticipation today amid hopes that the next steps of the Brexit bill debate will go smoothly.
Euro (EUR) Exchange Rates Tumble as German Factory Orders Print Unexpected Contraction
The Euro (EUR) weakened against many major rivals including an advancing Pound today, as the shared currency was weakened by the latest Eurozone data.
Most of this week’s Eurozone data had been optimistic so far, but this morning’s German factory orders and French trade balance disappointed investors.
German factory orders unexpected contracted at -1.3% rather than recovering to 0.3% as expected.
On top of this, French trade balance and consumer confidence data also came in worse than expected this morning.
Pound (GBP) Exchange Rates Firm in Anticipation of Brexit Developments
The Pound’s movement has been mixed since last week, as volatility worsens amid expectations of upcoming Brexit uncertainties.
Investors are buying the British currency today amid hopes that the UK government’s Brexit bill will continue to smoothly pass through Parliament and make way for the Brexit transition period this year.
Sterling was also supported by Monday’s UK services PMI, which beat forecasts and boosted hopes of UK economic resilience.
Euro to Pound (EUR/GBP) Exchange Rate Awaits Further Eurozone Data
With early-week Eurozone data strong but today’s Eurozone data weak, the Euro’s support will likely remain mixed unless upcoming data paints a clearer picture of the bloc’s economic performance.
Thursday will see the publication of Germany’s November trade balance and industrial production results. These will give investors a better idea of whether or not Germany’s factory sector is showing any signs of resilience or recovery.
Eurozone unemployment rate data tomorrow, and French industrial production on Friday, could also inspire Euro movement.
Strong data could help EUR/GBP to recover from this week’s losses, but poor stats would make it easier for the Pound to push the pair even lower.
The Pound may also be supported if Brexit developments continue to run smoothly. However, the Euro to Pound (EUR/GBP) exchange rate could recover more easily instead if Brexit developments cause uncertainties to worsen.