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Euro Pound Sterling (EUR/GBP) Exchange Rate Steadies as UK Growth Stabilises

GBP EUR exchange rate outlook

EUR/GBP Exchange Rate Rangebound on Brexit Jitters Return as Johnson says Ruling out No-Deal is ‘Absolute Folly’

The Euro Pound (EUR/GPB) exchange rate stabilised today and is currently trading around €1.112 on the interbank market.

The Pound (GBP) held steady against the Euro (EUR) following the publication of the UK growth data for the first quarter, which stabilised at 0.5%

Nancy Curtin, a Chief Investment Officer at Close Brothers Asset Management, remained downbeat, however, saying:

‘With the no-deal Brexit cause rejuvenated, political uncertainty continues to wrack the minds of investors, and businesses are refraining from deploying capital. The UK economy will likely remain sluggish until the Brexit dilemma is finally resolved.’

Sterling traders have remained jittery following comments from Boris Johnson, the Tory leadership favourite, who insisted that taking a no-deal Brexit from the table would be ‘absolute folly’.

Mr Johnson said:

‘I’m not attracted to the idea of a no-deal exit from the EU…  [But] I think it’s an essential tool of our negotiation.’

EUR/GBP Exchange Rate Holds Steady as Eurozone Inflation Fails to Impress

The Euro was left unmoved following the flash headline Eurozone inflation figures for June today, which stabilised at 1.25%

Core Eurozone inflation data, however, increased above the forecast 1.0% to 1.1%.

The G20 summit is remaining in focus for many single currency traders today, however, as the US and China are due to debate trade, amid recent tensions between the two superpowers.

Euro could benefit from an emerging trade consensus between the US and China, however, as this would increase risk appetite, weakening the safe-haven US Dollar as traders flee to riskier assets.

As the European currency is negatively correlated to the US Dollar, we could see the Euro begin to rise against the Pound later on today.

Hopes are running high that a US-China trade deal could emerge, following comments from US Treasury Secretary Steven Mnuchin, who said:

‘We were about 90% of the way there [with a deal] and I think there’s a path to complete this.’

EUR/GBP Outlook: Sterling Could Fall on Heightened No-Deal Brexit Fears

Euro traders will be paying close attention to developments surround G20 over this weekend.

We would likely see the Euro hold onto some of its gains into Monday, if the US and China successfully secure a tentative trade deal.

Monday, meanwhile, will see the printing of the German unemployment rate figures for Jun, which are expected to ease.

German Markit Manufacturing PMI figures for June, also released on Monday, are expected to hold at 45.4.

Sterling investors, meanwhile, will be looking ahead to Monday’s UK Markit Manufacturing PMI figures for June, which are expected to improve.

The Pound Euro exchange rate will, however, remain fixated on political developments surrounding the Tory leadership race and Brexit next week.

Any further indications that Boris Johnson could push forward with a no-deal on 31 October will leave many Sterling traders feeling jittery.

As a result, we could see the GBP/EUR exchange rate begin to fall.