- EUR GBP Drops as UK MPs Plan to Amend Brexit Bill – MPs from both sides of party lines plan to oppose triggering of Article 50 until government alters Brexit plans.
- German Business Confidence Drops – Euro slides with business leaders uncertain about future.
- UK GDP Report Ahead – Pound likely to drop as growth expected have slowed in 2016.
After briefly spiking yesterday morning, the EUR GBP exchange rate fell again overnight as markets reacted positively to opposition MPs plans to amend the Article 50 bill when it passes through Parliament.
Possible Brexit Bill Amendments Strengthen Pound Euro (GBP EUR)
The Euro Pound (EUR GBP) exchange rate dropped yesterday evening as opposition MPs and some rebel Tories began planning possible amendments to the UK government’s upcoming Brexit bill, after the Supreme Court ruled that Article 50 could not be triggered without a vote in parliament.
While Keir Starmer, the shadow Brexit secretary, said that Labour did not wish to ‘frustrate’ the Brexit process and ignore the will of the people who had voted to leave, it is understood that he will lay out a set of amendments to show a clear opposition to the Conservatives and prevent the government from having complete control over leaving the EU, saying;
‘Triggering Article 50 is just the start, not the end, of the Brexit process, so it is important we ensure there is proper grip and accountability throughout the negotiations.’
Meanwhile the Lib Dems plan to block the bill until a second referendum on the terms of Brexit is agreed upon by the government. As Leader Tim Farron explained;
‘We accept that the government has got a mandate to go and negotiate Brexit, We’re not trying to derail last June’s referendum. What we are saying is that the government does not have a mandate, on a very narrow majority, to go and negotiate any result, any outcome that it wants.’
However there are worries that Prime Minister Theresa May will threaten to move forward without a deal if the MPs do not back the bill.
Euro Weakened by Drop in German Business Confidence
The Euro was softened further this morning following a disappointing drop in Germany’s latest Business Climate reading.
The IFO survey reported that confidence slumped from 111 to 109.8 in January, falling short of expectations that it would see a modest rise to 111.3 and reaching its lowest levels since September.
The drop was attributed to lower growth expectations from business leaders and concerns over the political stability of the Eurozone as the threat of populism across the continent threatens to shake up the political landscape ahead of a number of key elections.
EUR GBP Exchange Rate Forecast: UK GDP Figures Ahead
The EUR GBP exchange rate may rally on Thursday as economists expect the UK’s fourth quarter GDP figures to show that growth slowed towards the end of 2016, causing it drop from 2.2% to 2.1% as the economy began to feel the impact of Brexit.
Meanwhile, Germany’s Consumer Confidence report could prompt an uptick in the Euro as it is forecast to rise from 9.9 to 10 in February.
Looking further ahead Sterling is likely to falter in the coming weeks as we move closer to March, with the expected triggering of Article 50 and the beginning the formal Brexit process likely to cause demand for the Pound to plummet.
Current Interbank Exchange Rates
At the time of writing the EUR GBP exchange rate was trending around 0.85 and the GBP EUR exchange rate was trending around 1.17.