Homepage » Brexit » Fresh Hopes for Irish Border Resolution Trigger Pound to Euro Rally

Fresh Hopes for Irish Border Resolution Trigger Pound to Euro Rally

Brexit has been in the headlines again today, resulting in the best Pound to Euro exchange rate since early November.

  • GBP EUR rate rises to 1.1381 – EUR GBP trades down at 0.8786
  • Pound accelerates on Irish border rumours – Irish PM remains cautious
  • Eurozone unemployment hits 9-year low – Euro fails to beat stronger Pound
  • Major manufacturing readings incoming – UK and Eurozone data out Friday

While Eurozone jobs and inflation stats have also been supportive, the Euro has failed to overpower the stronger Pound.

Pound to Euro Rate Rises on Irish Border Optimism

Pound traders have had a field day today, heavily buying into the currency because of optimism about the Brexit process.

Hopes are that the Irish border problem could be resolved in the near-term, ahead of a key meeting of EU leaders in mid-December.

This sudden optimism about a Brexit breakthrough follows yesterday’s Pound rise, where Sterling advanced on rumours that the UK government would pay a larger ‘divorce bill’.

An EU official has stated that Wednesday’s news was ‘a substantial breakthrough’ and has added that;

‘[This] has given everyone a sense of optimism that a landing zone is in sight’.

Reluctant to label this a breakthrough ahead of time, however, Irish PM Leo Varadkar has said;

‘We are not at a decision point at the moment. Things are changing on a daily basis and are rapidly evolving’.

Strong Eurozone Stats Fail to Push Up EUR/GBP Exchange Rate

Eurozone economic data has been strongly supportive today, but not enough to trigger a EUR/GBP rally.

Unemployment in the single currency bloc has been reported down in October, from 8.9% to 8.8%.

This data was even more positive because analysts had forecast stagnation during the month.

Slightly less notable were the Eurozone inflation estimates for November, which showed a year-on-year rise from 1.4% to 1.5%.

While good news, this was a hair below the expected increase to 1.6%.

Manufacturing Stats in the Spotlight for Future GBP/EUR Rate Movement

Both the UK and Eurozone will be releasing manufacturing activity stats on Friday morning, which are all considered medium-impact news.

The UK’s reading for November is tipped to show a minor rise from 56.3 points to 56.5. Such a result could firm the Pound, despite it being only a minimal increase.

The Euro could overpower the Pound, however, as several manufacturing measures are due out and all are tipped to show growth in November.

Key releases to watch out for will cover Germany and the Eurozone, although higher manufacturing levels in Greece could provide an added boost to the Euro.

Outside of these scheduled data releases, the Pound might see additional movement from further Brexit developments.

In the event that UK and EU ministers announce a surprise breakthrough in negotiations, then the Pound could see its third Brexit-linked rally of the week.

Current Interbank GBP EUR Exchange Rates

At the time of writing, the Pound to Euro (GBP EUR) exchange rate was trading at 1.1381 and the Euro to Pound (EUR GBP) exchange rate was trading at 0.8786.