GBP/EUR Exchange Rate Volatile as Further Brexit Disagreements Cause Rifts in Cabinet
The GPB/EUR exchange rate is currently trading at €1.13, having plummeted by -1.4% today as Brexit uncertainty continues with Theresa May facing a backlash from some members of her party.
Brexit Secretary Dominic Raab’s earlier resignation has severely damaged confidence in Theresa May’s Brexit deal, sending the Pound sharply lower as GBP sentiment sours.
GBP/EUR Exchange Rate Tumbles as Brexit Secretary Dominic Raab Resigns
The GBP/EUR exchange rate has seen considerable volatility after Theresa May’s Wednesday Cabinet meeting, with further uncertainty in store as the Prime Minister faces the House of Commons today.
Although Brexit negotiations seemed to have been taking a more decisive turn, the European Chief Negotiator Michel Barnier warned: ‘We still have a long road ahead of us on both sides.’
His comments did little to calm Sterling volatility, with Remainer MP Anna Soubry highlighting the seriousness of the situation:
Raab’s resignation marks the end of PMs Withdrawal Agreement. This is v serious the PM will clearly be considering her position. My own view is that we need a Govt of National Unity and we need it now.
— Anna Soubry MP (@Anna_Soubry) November 15, 2018
Political news aside, in a further blow to the high street, UK retail sales dropped in October by 0.5% following last month’s drop of 0.8%. This wrongfooted investors who had expected to see a slight rise on the month.
EUR/GBP also Affected by Brexit Turmoil as ECB’s Cœuré Speaks
Executive board member of the European Central Bank (ECB) Benoît Cœuré is set to speak in Switzerland today, with any hawkish comments potentially strengthening the single currency and buoying investor sentiment.
Euro (EUR) demand has been hit recently following news that the Eurozone trade balance had dropped from 16.8 billion to 13.4 billion, reflecting global trade tensions.
The Euro Pound Sterling (EUR/GBP) exchange rate remains in a volatile state as Brexit negotiations continue to weaken Pound sentiment, while investors await further developments.
Pound Sterling Euro (GBP/EUR) Exchange Rate Outlook: ECB Hawkishness Likely to Boost Euro
The Pound (GBP) remains highly volatile at the moment although it could recover some ground if Theresa May puts in a convincing performance in the House of Commons.
Nevertheless, with rumours circulating of a vote of no-confidence in the Prime Minister, Pound investors will likely be waiting to see what happens in the next 24 hours before offering GBP any support.
Euro investors will have their sights on ECB Governor Mario Draghi tomorrow, with any hawkish comments from him likely to strengthen the Euro.
Overall, Brexit developments will remain the most influential factor in the GBP/EUR pairing, with data releases taking a back seat until key political issues are resolved.