After an exceptionally strong close to last week, the Pound stands to rise further on Monday with services data.
- GBP EUR rate closed at 1.18 on Friday – GBP USD traded at 1.26
- GBP gains triggered by single market hopes – Could UK pay to stay?
- Euro softness ahead of key votes – US Dollar weakened by investor action
- EU votes could rock Euro confidence tomorrow – UK services PMI set to rise on Monday
The Euro is on the edge of a potential crash on Sunday’s votes, while the US Dollar stands to rise on Monday on PMI data.
Pound Sterling Exchange Rate News: GBP Boosted on Single Market Access Plans
The Pound ended trading on Friday at a rate of 1.18 against the Euro and 1.26 against the US Dollar, which came after Thursday afternoon brought a GBP-bolstering announcement from Brexit Secretary David Davis.
Commenting on the post-Brexit UK, Davis suggested that the UK might be able to pay to remain in the single market after leaving the EU, rather than being separated entirely after the process.
This triggered a prolonged rally over Thursday and Friday, although the Pound shed many of its prior gains on Friday due to overnight profit-taking.
Euro Weakened on Voting Fears, US Dollar Flopped after Mass Investor Buy-In
The Euro reached the end of the European trading session in a mixed state on Friday last week, on account of high investor concern about Sunday’s European political events.
Eurozone data was thin on the ground, with the only news being that Spanish unemployment had risen in November by 24.84k persons instead of dropping as expected.
The US Dollar ended trading on Friday in a fairly poor position, though mainly on account of gross profit-taking on the part of USD investors.
The US Dollar previously soared in value over Wednesday and Thursday, with OPEC’s decision to cut oil production resulting in crude prices rising.
Before investors piled in, this greatly boosted the value of the USD, as did the November unemployment rate, which fell from 4.9% to 4.6%.
Less supportive on Friday was President-Elect Donald Trump, who warned that US companies that tried to leave the country could be financially punished.
Future GBP EUR USD Forecast: Mass Euro Fluctuations Possible on Sunday’s Votes
The big events to watch out for with future Euro movement will come tomorrow, when Austria and Italy hold key votes.
Austria is deciding its next President, and the result is currently too close to call. Italy will be holding a constitutional referendum, although this has been hijacked by a decision on whether to keep Matteo Renzi as the nation’s Prime Minister.
If Norbert Hofer, the Eurosceptic candidate, is elected President and Italy votes ‘No’ to the proposed reforms (and Renzi), then the Euro may enter trading next week in an extremely weak position.
Monday’s UK data could bolster the Pound, as the November services PMI is expected to show a slight rise on the month.
Similar PMI support could come for the US on Monday, as the ISM non-manufacturing PMI has also been forecast to rise.
Recent Interbank Exchange Rates
At the time of writing, the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.18 and the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.84.
The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.26 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.78.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.06 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.93.