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Could Government Defeat on Article 50 Amendment Send EUR GBP Spiralling?

The Euro has dropped by -0.2% against the Pound today on the back of hopes that peers could vote to secure the rights of EU citizens after Brexit.

  • EUR GBP rate slips to 0.85 – GBP EUR advances to 1.17
  • Euro damaged by slide in manufacturing – German unemployment drop fails to restore EUR
  • Sterling demand rises with odds of Brexit bill amendment – UK manufacturing worse-than-expected in February
  • EUR recovery possible on German inflation today – Pound could slide if construction PMI drops tomorrow

Eurozone news today has been mixed and failed to provide enough impetus for a Euro rise; while Germany’s manufacturing PMI has been revised up and unemployment has dropped in February, both Spain and France have posted slowing levels of manufacturing activity.

Other Eurozone news has included an overall manufacturing PMI rise from 55.2 to 55.4, a smaller-than-expected increase.

Pound-boosting developments of late have come from the House of Lords, where peers continue to debate the Article 50 bill. Although an amendment to keep the UK in the EU single market was defeated at the start of the week, hopes are still high for another amendment to be approved.

If voted through, this would ensure the rights of EU citizens after Brexit, which could give the UK government an advantage during negotiations as it may be seen as a conciliatory gesture towards EU leaders.

Other UK ecostats have focused on the February manufacturing PMI, which printed below forecasts with a drop from 55.9 to 54.6. This may point towards a trend of slowing manufacturing as Brexit gets underway.

Today’s remaining high-impact Eurozone news will be German inflation rate figures for February, which are expected to show a monthly and annual rise. If these forecasts prove accurate, then the Euro could well bounce back against the Pound due to signs of clear economic strength in Germany.

Aside from any unexpected developments in the Lords, the next Pound-shifting news is Thursday’s construction PMI, which is expected to remain unchanged at 52.2 points.

In the event that this figure drops, the Pound could fall due to 52.2 already being close to the sub-50 contraction range, but if it rises then Sterling may well strengthen and improve the GBP EUR exchange rate.

Current EUR GBP Interbank Exchange Rates

At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.85 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.17 today.