Pound to Euro Exchange Rate Steady as Brexit Outlook Unchanged
A lack of real changes in the Brexit process last week left the Pound (GBP) unappealing, though the Pound Sterling to Euro (GBP/EUR) exchange rate has been able to avoid losses due to some stronger than expected UK data.
Last week saw GBP/EUR open at the level of 1.1425, before edging lower for much of the week and touching a three week low of 1.1317 on Thursday.
The pair recovered much of its losses on Friday though, and closed the week at the level of 1.1415.
When markets opened this week, things were little changed. Once again, UK Prime Minister Theresa May headed for Brussels for fresh attempts at renegotiating the contentious Irish backstop issue. This kept pressure on Sterling (GBP).
As for the Euro (EUR), the latest Eurozone data failed to give investors reason to buy the shared currency.
Pound (GBP) Exchange Rates Lack Drive as Brexit Process Sees No New Fresh Direction
Last Thursday, the UK government’s Brexit deal once again faced a day of debate in Parliament – and the outcome of the debate once again didn’t give investors much in the way of clarity over how Brexit could unfold.
The UK government held a vote for support over its negotiating strategy, but this was blocked by Parliament as Eurosceptic backbenchers in the ruling Conservative Party feared the government would try to prevent a No-deal Brexit.
The news was perceived as weakening the government’s position in Brexit talks with the EU.
The government is attempting to get assurances over the contentious issue of the Irish backstop, which many in UK Prime Minister Theresa May’s Conservative government do not agree with.
With not much over one month to go now until the formal Brexit date, fears of a No-deal Brexit are persisting and keeping pressure on Sterling.
Euro (EUR) Exchange Rates Unappealing as Eurozone Data Falls Short
Demand for the Euro has been limited over the past week, as Eurozone data continues to disappoint investors. This has meant the Euro has been unable to capitalise on Sterling weakness.
While Germany just scarcely avoided a recession in Q4 2018 according to last week’s growth data, the growth data still fell short of expectations. Germany wholesale prices were highly disappointing in January as well.
These stats only kept investors concerned about Germany’s slow economic outlook. As Germany is the Eurozone’s biggest economy, this has made investors more concerned about the Eurozone’s overall economic outlook.
On Friday, the Eurozone’s December trade balance results were published and slipped from €19.7b to €17b. These made it easier for GBP/EUR to recover on Friday and the Euro still lacks market demand on Monday morning.
Pound to Euro (GBP/EUR) Exchange Rates Investors Await Eurozone Confidence Stats
While much of last week’s biggest Pound to Euro exchange rate fluctuations were due to Brexit developments, a lack of Brexit developments in the coming sessions could leave the Pound unappealing or limp versus the Euro.
Instead, investors are likely to focus on major Eurozone data due for publication in the coming sessions.
Tuesday will see the publication of ZEW’s February economic sentiment indexes for Germany and the Eurozone.
With concerns about Germany’s economic slowdown still in focus for Euro investors, Germany’s figures could be particularly influential for the Euro if they surprise markets.
Wednesday’s Eurozone consumer confidence stats and Thursday’s January inflation rate results for Germany could prove influential too.
As for the Pound, with time running lower on the Brexit clock any major Brexit developments are likely to have a significant impact on the Pound to Euro (GBP/EUR) exchange rate.