- GBP EUR rises to 1.17 – EUR GBP drops to 0.85
- Pound gains triggered by report claiming EU will be damaged by bad Brexit deal – GBP may crash if MPs approve Article 50 bill today
- Euro mixed after troubling Greek manufacturing stats – Glut of PMI and sales figures due Friday
The Pound has advanced strongly against the Euro this afternoon, climbing by 0.9% in the pairing on the back of a leaked report concerning future Brexit talks.
The report has indicated that European Commission negotiators are concerned that if a ‘workable’ deal with the UK cannot be reached on Brexit, this may have a damaging economic effect on both the UK and the European Union. The conclusion has been that EU officials will now be looking to grant the UK a favourable exit instead of a punitive one; this outlook by investors has seen the Pound rise considerably ever since the late-morning leak.
The Pound still remains in danger of an incoming crash, however, given that MPs are actively debating the Article 50 bill in preparation of this evening’s vote.
(Last updated February 1st, 2017)
The Pound has managed a small advance against the Euro today, ahead of a possible crash due to a Parliamentary vote. The latest appreciation has come despite a volatile House of Commons debate on Tuesday, which saw MPs line up to take sides over whether the Government should be granted the ability to trigger Article 50.
This situation will continue today, with a Commons vote on the Article 50 bill expected in the evening. Though opposition is expected, the bill is still expected to be passed, which could damage the Pound as it will mean one step closer to the actual finality of Brexit.
The Euro has dipped against the Pound today following Greek manufacturing in January contracting further from 49.3 to 46.6; this follows harsh winter conditions across the Eurozone. Other Eurozone PMIs have been more positive, with the overall figure rising in January from 54.9 to 55.2.
The next notable Eurozone news will come on Friday morning, when Eurozone-wide retail sales and services and composite PMI stats are due.
(Last updated February 1st, 2017)
The Euro could have better fortune in terms of its reaction to Eurozone data today as optimistic predictions for Eurozone GDP stats might prove accurate and push the Euro up against the Pound.
Pound Sterling Demand Limited on Monday due to Devolved Leaders Meeting
The Pound Euro exchange rate remained negative during Monday’s European trading session, mainly due to a lack of demand for the Pound on the back of Brexit news.
Notably, Prime Minister Theresa May held a meeting with the heads of the devolved nations, which had the promise of drama due to talk of plans for Scotland and Wales to leave the EU with the UK but remain in the EU single market (unlike the UK).
The meeting’s outcome was fairly uninspiring, however, with Welsh First Minister Carwyn Jones remarking that differences with the Government were ‘not irreconcilable at this stage’.
Euro Interest Triggered by Eurozone Confidence Scores
The biggest Eurozone news on Monday concerned currency bloc-wide confidence and sentiment figures for January, which showed rises in most fields bar the business confidence one, which remained at 0.77 points on the month.
Other Eurozone news showed Spanish Q4 GDP growth rates slowing marginally on the year but reprinting at 0.7% on the quarter.
Today’s GBP EUR Forecast: Sterling Shifts Possible with Article 50 Bill Up for Debate
While today will bring UK mortgage and credit figures for December, the greatest impact could instead be had by a debate in the House of Commons.
MPs are due to start discussing the Article 50 bill, which must be approved to allow the Government to trigger the article itself and begin the UK’s exit from the EU.
With a scant handful of days to actually debate and amend the bill, it remains to be seen whether MPs will bother trying to amend the bill given that they have a very short window in which to do so.
Eurozone news today will consist of GDP and unemployment figures, for Germany, France and the overall Eurozone.
Also expected are speeches from European Central Bank (ECB) officials, namely President Mario Draghi in the morning and later on, Yves Mersch and Benoit Coeure.
The imminent French GDP growth rate is expected to rise on the quarter in Q4, German unemployment for January is set to show a drop of -17k persons and Eurozone unemployment is due to stagnate at 9.8%.
Eurozone GDP in Q4 is forecast to rise on the quarter but remain static on the year, while base Eurozone annual inflation in January is set to rise and core inflation is due to reprint at 0.9%.
Recent GBP EUR Interbank Exchange Rates
At the time of writing, the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.17 and the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.85.