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Euro to Pound Sterling Exchange Rate Tumbles despite Fresh No-Deal Brexit Warnings

Euro to Pound Exchange Rate Weaker amid Lack of Support for EUR

Due to a combination of poor Euro (EUR) support and market optimism about Britain’s job market, the Euro to Pound (EUR/GBP) exchange rate continued to fall back from its recent highs today.

Following last week’s modest advance from 0.8870 to 0.8902, EUR/GBP briefly touched on a fresh high of 0.8931 yesterday which was the worst level for the pair since the first half of January.

As the Euro lacked the support to trend near its best levels, investors sold EUR/GBP from its highs in profit taking and at the time of writing today the pair was trending closer to the level of 0.8893.

Today’s Euro to Pound exchange rate slip came despite continued uncertainty over Britain’s economic and political outlooks, as well as fresh comments expressing concerns about the possibility of a no-deal Brexit.

Euro (EUR) Exchange Rates Pressured as Eurozone Inflation Expectations Even Lower

While the European Central Bank (ECB) appeared to take a less dovish than expected stance on monetary policy last week, the Euro’s benefit from this stance has been short-lived as investors remain anxious about the Eurozone economic outlook.

Markets still expect the ECB could be put under pressure to take a more dovish stance on monetary policy soon, as inflation expectations in the Euro continue to worsen.

Eurozone inflation expectations have fallen to a record low, according to reporting from Bloomberg, in news that put additional pressure on the Euro today.

According to Christoph Rieger, Head of Fixed-Rate Strategy at Commerzbank AG, the ECB President likely has more to be concerned about now:

‘Draghi is probably not very satisfied with 5y5y ILS hitting a fresh record low,’

Pound (GBP) Exchange Rates Resilient despite No-Deal Brexit Fears

Investors have been hesitant to sell the Pound much further, even despite broad uncertainties about Brexit and how it is impacting UK political and economic outlooks.

The Pound suffered significant losses throughout May, and as UK growth data has disappointed this week and the nation’s next Prime Minister looks likely to be one that supports a harder Brexit, there is not much news supporting Sterling.

However, the British currency is avoiding further losses, with investors buying the British currency back from its recent lows in profit taking.

The Pound’s slight rebound, which has been supported slightly by yesterday’s stronger than expected UK job market report, has been little affected by fresh comments today from Britain’s government that the nation is still ill-prepared for a possible no-deal Brexit.

Euro to Pound (EUR/GBP) Exchange Rate Investors Await Notable Eurozone Ecostats

Being driven largely by European Central Bank (ECB) and Brexit speculation so far this week, the Euro to Pound (EUR/GBP) exchange rate could see a more solid shift in movement depending on the strength of Eurozone ecostats towards the end of the week.

Thursday will see the publication of Germany’s final May inflation rate results, as well as the Eurozone’s April industrial production figures.

Friday will follow with German wholesale prices and French inflation data.

A slew of stronger than expected Eurozone ecostats could soften the Eurozone’s recent concerns about the Eurozone economy and European Central Bank (ECB) monetary policy. This would also help EUR/GBP to climb again.

Concerning UK political developments may also make it easier for the Euro to Pound (EUR/GBP) exchange rate to gain, but the pair could tumble further instead if the Eurozone data disappoints.