- GBP EUR Exchange Rate Fluctuates – BoE Governor may leave in 2018.
- Euro (EUR) Supported by Trade Deal – EUR strengthened by Canadian trade agreement.
- UK Mortgage Approvals Surge – Pound advances following impressive data.
The GBP EUR exchange rate has been hit by rising volatility this morning as market speculation on the future of Bank of England Governor Mark Carney has reached fever pitch.
Pound (GBP) Euro (EUR) Volatile Following Conflicting Reports on Carney Future
The Pound (GBP) to Euro (EUR) exchange rate has been marked by some dramatic swings this morning as investors reacted to the news that Carney may not serve his full term to 2021 as BoE Governor but instead may leave in 2018 as originally planned.
The possibility of the BoE Governor leaving his post in the middle of the UK’s ‘Brexit’ negotiations with the EU has placed considerable weight on the Pound in recent days, with Sterling dropping by around half a cent as the session opened this morning.
The Sunday Times reported yesterday that;
‘Senior City figures who know the Governor said they believed it was more likely than not that he would choose to return to Canada in 2018, adding that his family’s feelings were a concern.’
However the GBP EUR exchange rate quickly recovered following a conflicting story from the Financial Times this morning, who reported that;
‘Mr Carney is said to be leaning strongly towards staying in his post. He would like to help steer the UK economy through treacherous waters once the government triggers Article 50 in March 2017.’
Carney had said that he would make his decision whether to stay by the end of the year, but reports now suggest that he will announce his intentions sometime this week in order to prevent further damage to Pound Sterling (GBP) exchange rates.
Euro (EUR) Money Transfers Strengthened by Canadian Trade Deal
Euro (EUR) exchange rates were strengthened this morning following the news that the European Union and Canada have finally sighed a new trade deal after fears last week that it would be compromised by Belgian opposition.
The Comprehensive Economic and Trade Agreement (CETA) was delayed last week after Belgium’s Wallonia region vetoed the deal, as the agreement required the endorsement of all EU member states.
The Euro advanced as the session began as markets approved of the deal, which is hoped will provide an additional £9.8billion worth of trade a year by removing 99% of tariffs between the two economies.
However the single currency was unable to maintain its gains against the Pound (EUR GBP) as trading progressed, with the CETA agreement overshadowed by rising sentiment towards Sterling as speculation on the future of BoE Governor Mark Carney pointed towards him serving his full term.
Less-than-impressive German retail sales numbers also left the Euro struggling.
GBP EUR Exchange Rate Rises on Upbeat Mortgage Data
The GBP EUR exchange rate has advanced following impressive British mortgage approvals figures. Approvals rose to 62.9k in October, up from 60.1k the previous month and beating expectations of 61.5k, reaching the highest levels since the UK’s vote for ‘Brexit’.
Meanwhile the Eurozone posted both its consumer price index and GDP data this morning. The CPI figures showed a slight rise in inflation from 0.4% to 0.5% in October, while the GDP report showed that the Eurozone economy stagnated at 1.6% in the third quarter.
While the data was in line with market predictions, the apparent slowdown in the European economy is likely to add to speculation that the European Central Bank will extend its quantitative easing programme past March 2017, placing pressure on the Euro.
Current Interbank Exchange Rate
At the time of writing the GBP/EUR exchange rate was trending around 1.11 and the EUR/GBP exchange rate was trending around 0.90.