- GBP EUR 2016 Exchange Rate Hovers Near 1.19 – Last week sees little sustained change in value
- Exchange Rate Sees Little Shift on Friday – Eurozone stats unable to influence movement
- Germany’s IFO Results Impress – But Euro weaker on USD strength
- GBP Forecast: UK Growth on Friday – Eco-calendar otherwise quiet as holidays near
GBP EUR 2016 Exchange Rate Trends Narrowly Below 1.19 on Tuesday
Tuesday saw little real change in the GBP EUR 2016 exchange rate. The day’s UK ecostats from CBI were optimistic but failed to give the Pound any notable support, while the Euro continued to struggle from the ongoing strength of the US Dollar.
The Pound dipped slightly later in the day, causing GBP EUR to head towards the end of the European session below its opening levels. However, this was ultimately a narrow difference as the pair trended close below 1.19 for most of the day.
Sterling was weakened slightly by the latest comments from UK Prime Minister Theresa May. In a testimony to Commons, May refused to confirm that the UK government would offer a Parliament vote on the final terms of the Brexit deal. This worsened concerns about Britain maintaining single-market access following the Brexit process.
(Previously updated 12:46 GMT 20/12/2016)
The GBP EUR 2016 exchange rate fluctuated on Tuesday morning. Trade in the Pound and Euro both lightened day on day as the holiday period approached and investors began to wrap up short positions, leaving the exchange rate volatile.
The day’s ecostats didn’t influence GBP EUR 2016 exchange rate movement either. Germany’s producer price results from November beat expectations and escaped contraction year-on-year, but this was not enough to bolster the Euro’s defenses.
Instead, Sterling continued to struggle from Brexit concerns while the Euro remained weak due to a strong US Dollar. GBP EUR fluctuated near the level of 1.19 for most of the morning.
(Previously updated 16:46 GMT 19/12/2016)
GBP EUR 2016 Exchange Rate Hits Near Two-Week-Low
The GBP EUR 2016 exchange rate spent most of Monday afternoon below the level of 1.19 despite the US Dollar’s strength keeping the Euro at bay for most of the day.
Sterling’s latest selloff was due to various reasons such as the currency being sold from its recent highs, as well as concerns that a Brexit transition period may still end in a full UK divorce from the EU’s single market.
The Eurozone’s Monday data supported the shared currency slightly too. The IFO’s December business confidence results from Germany impressed traders, with business climate improving to 111.0 and current assessment rising to 116.6.
GBP EUR may recover in the coming days, but the Deutsche Bank predicts a bearish 2017 for the Pound in its latest GBP forecasts.
(Previously updated 12:47 GMT 19/12/2016)
Monday saw the GBP EUR 2016 exchange rate slump slightly. A lack of fresh movement factors in Sterling trade left the currency limp. With markets quieting down in the run up to the holidays, GBP EUR was easily weakened by ongoing UK strike controversy.
Chaos is expected with UK railways, train stations and post in the coming weeks despite the reliance on public services in the run up to the holiday period, which dampened UK market sentiment on Monday.
Lingering Bank of England (BoE) bearishness also held the British currency back. By lunchtime on Monday, GBP EUR had slipped below 1.19.
(Published 07:00 GMT 19/12/2016)
The GBP EUR 2016 exchange rate fluctuated throughout last week’s trade session on a lack of direction. Both currencies became increasingly volatile as BoE and Brexit concerns weighed on the Pound while Fed rate outlooks weakened the Euro.
The Pound Euro exchange rate began the week trending just above 1.19. Despite multiple limited rallies throughout the week the pair failed to break the key 1.20 level and ended the week near opening levels.
Pound (GBP) Limited by Ongoing Brexit and Interest Rate Concerns
Last week’s UK data generally failed to influence Pound exchange rates. Investors briefly rallied after the week’s strong UK Consumer Price Index (CPI) results showed a spike in inflation, but later in the week the Bank of England (BoE) indicated that this was not enough to shift the monetary policy outlook.
The BoE left monetary policy frozen in its final meeting of 2016, as expected. The bank did acknowledge that the global inflation outlook for 2017 was higher, but hinted that this would not mean tighter UK monetary policy regardless.
This neutral outlook disappointed traders and erased much of the UK inflation optimism that factored into GBP trade earlier in the week.
Towards the end of the week, GBP investors also became concerned over the incoming Brexit once again.
On Thursday night, EU officials held an informal meeting on how they would be tackling the Brexit process. Some key comments that emerged included the warning that negotiations for a post-Brexit UK-EU trade deal could take as long as ten years.
However, the Pound was able to hold above its worst levels due to comments from UK Chancellor Philip Hammond, who stated;
‘I don’t expect that it will take as long as that. There will be two stages in this process: first we will negotiate a deal for our exit from the European Union and, once we have started that process, we will, in parallel, begin to negotiate new arrangements with our former European Union partners so that we can continue to trade and work closely with them.’
Euro (EUR) Limited by US Dollar (USD) Strength and Eurozone Economic Concerns
Like the Pound, demand for the Euro was limited last week due to a number of downside risks putting pressure on EUR trade.
The primary reason for the Euro’s weakness throughout the week was the bullishness of the US Dollar. The Euro commonly sees a negative correlation with the ‘Greenback’ due to the popularity of the USD EUR exchange rate.
Last week saw the Federal Reserve hike US interest rates as expected, but the Fed also adopted an unexpectedly hawkish outlook towards 2017 monetary policy.
While forecasters expected the bank to hint at two rate hikes throughout the year they instead indicated they could hike US rates as much as three times at 25 basis points each.
This sent the US Dollar soaring and weakened the Euro significantly, allowing GBP EUR to hold away from its worst levels throughout the week.
The shared currency was also weakened by a renewed debt relief feud between Greece, the Eurogroup and the IMF, which some analysts perceived as putting Greece’s future in the Eurozone under question again.
GBP EUR 2016 Exchange Rate Forecast: Light Trade amid Holiday Season
The coming week won’t be an entirely busy one for UK or Eurozone ecostats, most of the movement throughout the week will depend on the latest Brexit news as well as Eurozone economic concerns and the strength of the US Dollar.
Germany’s December business confidence survey results will be published by IFO on Monday, followed by the Eurozone’s October construction output figures.
Tuesday’s ecostats will be relatively low influence and is unlikely to cause much movement in the GBP EUR 2016 exchange rate.
Wednesday will see the publication of Britain’s public sector net borrowing results from November as well as the Eurozone’s December consumer confidence results.
The biggest ecostats of the week will be published on Friday just before markets close for the holiday period, including France and Britain’s final Q3 Gross Domestic Product (GDP) figures and the GfK January German consumer confidence survey results.
Markets are likely to become quieter as the week progresses as investors take a break for the holiday period, which will see lighter, more trade in the GBP EUR 2016 exchange rate until the New Year.