- GBP EUR rate remains at 1.15 on Brexit statements – EUR GBP rate trends at 0.86
- Pound Sterling crumbles after investors gorge on strengthened GBP – Surprise rise in UK earnings seen
- Euro strengthened by rising December inflation – Construction flat in November
The Pound has failed to make any headway against the Euro today, having taken a thorough drubbing overnight from profit-taking.
Theresa May triggered the latest volatility for the Pound and could be set to repeat this on Thursday, given that she is due to speak at the World Economic Forum (WEF) in Davos and may further elaborate on her plans for the future UK-EU relationship.
(Last updated January 18th, 2017)
After an unprecedented day of gains for the Pound Euro exchange rate on Tuesday, the pairing has since slumped due to investors capitalising on a boosted Sterling and profit-taking to an extreme level.
This morning’s UK economic news has covered jobs data over November and December; against forecasts, claims dropped in December, while earnings rose and unemployment remained at 4.8%.
This hasn’t been enough to restore the Pound, however, which has remained weak after a day of high drama on the currency markets.
The Euro has been a slow and steady riser against Sterling today, thanks to both German and Eurozone inflation rising in December. One less positive development has been the lack of construction growth on the year in November, though this has failed to put a dent in present investor optimism about the Euro.
(Last updated January 18th, 2017)
The Euro was plainly outclassed against Sterling on Tuesday, but has the chance to rise today on inflation rate news.
Pound Sterling Euro Recap: Surprise Rise after PM Confirmed No Single Market Access, Parliament Vote
The Pound advanced by 1.8% against the Euro over Tuesday’s trading session, which was far from the expected market reaction to the day’s news.
Sterling received an early boost when inflation in December rose from 1.2% to 1.6% on the year and from 0.2% to 0.5% on the month, despite the associated inflationary pressures.
The main event, Theresa May’s Brexit speech, was a surprise for some and a mere confirmation for others; the UK would be leaving the EU single market, but on the best terms that the Government could arrange.
Immigration was touched on but frustratingly left ambiguous, while some observers speculated about the implied threat of slashing UK corporation tax to spite the EU if it didn’t agree to a favourable UK-EU trade deal.
The Pound properly started on its meteoric rise when May stated that Parliament would be voting on the final Brexit deal, potentially pre-empting a Government appeal loss for the Supreme Court’s verdict which is due soon.
Euro Supported by Rising ZEW Scores, not Enough to see EUR GBP Uptrend
The Euro was a soft option against the Pound on Tuesday, although Eurozone-centric data did prove generally positive.
While Italy’s trade surplus ticked down slightly, Eurozone and German ZEW surveys of economic sentiment rose notably in January.
Future GBP EUR Forecast: Today’s UK Jobs Stats Forecast More Claims and Higher Earnings
Today’s UK data will be out shortly, covering claimant count changes in December, as well as earnings in November and unemployment for November as well.
As it stands, UK claims are due to rise in December, earnings with bonuses have a slight uptick from 2.5% to 2.6% predicted. For unemployment, stagnation at 4.8% is due.
Eurozone news of note will include inflation rate figures for December, which are set to rise on the year but dip to -0.1% on the month.
Current Interbank Exchange Rates
At the time of writing, the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.15 and the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.86.