- Pound Euro 2016 Exchange Rate Down from Multi-Week Highs – GBP struggling to sustain strength
- Euro Sturdy on US Election Result – Stronger US Dollar keeps EUR weak
- GBP Forecast: Can Sterling Recover Losses? – All eyes on Trump
Donald Trump Wins 2016 US Election & Sends Pound Euro Exchange Rate Lower
As the US populace took to the polls to vote in the 2016 US election, it appeared as though Hillary Clinton would win the day.
However, in a situation eerily reminiscent of the UK’s decision to Brexit, the US voted for Donald Trump to become the nation’s 45th President.
Although US Dollar (USD) exchange rates did fall in response to the news, the decline certainly wasn’t as dramatic as many had anticipated.
That being said, the Pound Euro (GBP EUR) exchange rate still declined, with the pairing falling from close to a multi-week best of 1.12 to 1.10 over the course of the European session.
(Previously updated 08/11/2016)
Pound Euro 2016 Exchange Rate Sees Little Change on US Election Day
The Pound Euro 2016 exchange rate continued to trend within a relatively narrow range throughout Tuesday’s session. Throughout the day, GBP EUR scarcely ventured far from the key support level of 1.12.
It was confirmed on Tuesday afternoon that the UK government’s appeal against last week’s Article 50 ruling would take place on the 5th of December. However, with markets focused intently on developments in the day’s US election as citizens took to the polls, Sterling was unaffected by the news.
Instead, any of the narrow movements seen were likely a result of investors adjusting their positions to make the most of their predictions for President.
To recap, markets are predicting a win for Democrat Hillary Clinton. If Clinton wins, the US Dollar will likely see a brief but definite surge in the US Dollar. This could weaken USD’s rival, the Euro, and allow GBP EUR to advance.
However, a Brexit-style surprise Trump win is still possible. This would send markets into a panic for the remainder of the week, which could have the opposite effect and cause GBP EUR to fall.
(Previously updated 12:35 GMT 08/11/2016)
US Election Today – Will Clinton or Trump be Driving the Pound Euro 2016 Exchange Rate?
The US election is finally upon us, but what impact is today’s vote likely to have on the Pound Euro (GBP EUR) exchange rate?
As it stands, the Pound Euro 2016 exchange rate is trading above the 1.12 level despite the fact the US Dollar has weakened slightly (a circumstance which typically lends the Euro support) as investors brace themselves for the result.
This movement lasted throughout the morning. GBP EUR fluctuated within a narrow range, with both currencies taking a backseat to the day’s main attractions. The foreign exchange market was eerily calm regardless, and readjustments were limited as US citizens took to the polls.
Investors may react slightly to indications of a Clinton or Trump win in key tipping point States like Florida or North Carolina, but large currency movement is unlikely until concrete results are published from these States.
(Previously updated 09:09 GMT 07/11/2016)
Pound Euro 2016 Exchange Rate in Flat Monday Trade as US Election Approaches
The Pound Euro 2016 exchange rate ultimately saw little real change in trajectory throughout Monday’s European session, as both the Pound and the Euro were weakened and ignored thanks to renewed interest in a US Dollar rally.
USD continued to strengthen throughout the day due to bets that Clinton would win the White House in Tuesday’s US Presidential election.
However, some analysts have pointed out the eerie similarities between this week’s increase in Clinton bets and the increase in ‘Remain’ bets before the Brexit vote back in June. These analysts are quick to point out that a Trump victory is still highly possible.
As a result, the Euro may benefit on Tuesday if some investors move away from the US Dollar or risky currencies in favour of relatively safer assets.
(Previously updated 12:38 GMT 07/11/2016)
The Pound Euro 2016 Exchange Rate trended relatively flatly on Monday morning. Markets lost interest in Sterling after last week’s surge due to a perceived shift in the direction of Tuesday’s US election.
As the FBI cleared Democrat Hillary Clinton of criminal suspicion following a review of her use of a private email server, markets believed this to help Clinton’s polling numbers which in turn was seen to improve market stability.
As a result, investors flocked to the US Dollar on Monday. This weakened the Euro, which had seen much of its recent strength due to USD selloffs. GBP EUR was able to hold its ground on Monday despite Sterling falling against other rivals due to this USD movement weighing on Euro value.
(Published 07:00 GMT 07/11/2016)
Last Thursday saw the Pound Euro 2016 exchange rate’s biggest one-day gain in months thanks to a decision from High Court declaring that UK MPs should have the right to vote on the activation of Article 50. While strong elsewhere, the Euro couldn’t hold back Sterling’s advances.
GBP EUR gained around a cent and a half last week, climbing from around 1.11 to above 1.12 by the end of the week. The pair neared the key level of 1.13 during its highest point of the week on Thursday.
Pound (GBP) Confidence Improves on Hopes of Article 50 Vote
A challenge to the UK government’s decision to activate Article 50 and begin Britain’s formal withdrawal from the EU by March 2017 was upheld by the High Court last Thursday, causing the biggest GBP movement in recent weeks.
Three High Court judges decreed such a decision being made without a say from Parliament was unconstitutional and stated MPs must be able to vote on the activation of Article 50 in some form.
As a result, hopes that the Brexit process could be delayed or that the government could be persuaded to more aggressively pursue single market access in negotiations left markets cheery. This caused Sterling to soar on Thursday.
The Bank of England (BoE) also held its November policy meeting on Thursday, confirming that monetary policy was unanimously left frozen. The BoE also upgraded its UK Gross Domestic Product (GDP) forecasts.
Both of these factors added to Sterling’s significant Thursday rally, giving it its best one-day performance in quite some time. On Friday, the Pound continued to trend sturdily throughout the day on lingering optimism following Thursday’s rally.
Euro (EUR) Supported by Eurozone Data and US Dollar despite Muted Movement
After beginning on relatively bullish form, the Euro’s performance waned later in the week despite a number of upside risks to the shared currency.
For example, most of last week’s Eurozone ecostats were relatively positive. German employment beat expectations in October considerably, while the Eurozone’s September unemployment rate improved as expected.
Friday’s Eurozone services and composite data, while not as strong as preliminary figures had been, still indicated solid Eurozone growth. Germany’s service sector in particular actually beat preliminary figures in October. According to Oliver Kolodseike from HIS Markit;
‘Today’s survey results present a welcome rebound in German service sector activity, after September’s data highlighted fears of a substantial slowdown in the sector.
The service sector data follow positive numbers from the manufacturing sector, released earlier in the week. The combined output of both sectors points to the second-strongest rate of expansion so far this year and suggests that the German economy continued to grow at the start of the fourth quarter.’
Germany’s service PMI improved to 54.2, keeping the composite score to 55.1 as expected. The overall Eurozone services PMI came in at 52.8 due to poor performance in France, with the composite PMI coming in at 53.3 indicating lower-than-expected but still solid October growth.
The Euro also benefitted last week from weakness in the US Dollar.
Pound Euro 2016 Exchange Rate Forecast: US Election Result to Affect GBP EUR Movements
In the coming week, global markets will most likely have one thing in mind; the US Presidency. During Tuesday’s American session, US citizens will take to the polls to decide between Democrat Hillary Clinton and Republican Donald Trump as their next President.
The US Presidency affects world markets, as the US is the world’s biggest economy and financial centre. This means the result will have a direct effect on foreign exchange markets in some way regardless of country or currency.
The Euro is the US Dollar’s most popular currency partner, meaning weakness – or strength – in the US Dollar will have a particularly strong effect with the Euro’s value compared to the Pound.
As a result, the Pound Euro 2016 exchange rate may be able to advance next week if ‘status quo’ candidate Hillary Clinton wins and Euro investors return to the US Dollar. The opposite may happen if the unorthodox Donald Trump wins the White House.
Various Eurozone stats will be published on Monday, including Markit’s October Retail PMI and Eurozone September retail sales. Sentix will also publish its November investor confidence report.
Relatively influential UK stats will be published on Tuesday including September industrial and manufacturing production figures from the Office for National Statistics (ONS). NIESR will also publish its October growth estimate.
However, while the coming’s week’s data may influence Pound Euro 2016 exchange rates slightly, this will likely take a back seat to the US election in terms of how fundamental trends are changed.