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Pound Euro (GBP/EUR) Exchange Rate Drops as Concerns Rise Over Irish Backstop Ahead of ‘Plan B’ Vote

Pound Euro exchange rate forecast

GBP/EUR Exchange Rate Falls as Concerns Rise Ahead of Brexit Vote

The Pound Euro (GBP/EUR) exchange rate is down today and is currently trading around €1.1536 on the inter-bank market.

The Pound (GBP) failed to make any gains on the Euro (EUR) today as concerns have continued to mount over whether Prime Minister Theresa May will be able to gain any concessions over the Irish backstop – with time ticking down ahead of tomorrow’s important parliamentary vote on her Brexit ‘Plan B’.

The Irish backstop remains one of the most sensitive issues surrounding the UK-EU withdrawal agreement, and with it being one of the main reasons why ‘Plan A’ was rejected, Pound investors are concerned that both Ireland and the EU will refuse to concede on the issue.

Former Foreign Secretary Boris Johnson has remained optimistic, however, saying that if May succeeds in securing the ‘freedom clause’ over the Irish backstop she will receive ‘full-throated’ support from Parliament on her Brexit deal.

Johnson commented:

‘If we mean it, if we really try, I have no doubt that the EU will give us the Freedom Clause we need. . . So now is the time to stiffen the sinews. . . and go back to Brussels and get it.’

GBP could further weaken today if the Bank of England (BoE) Governor Mark Carney makes any downbeat remarks about the state of UK economy in comments at a question and answer session.

Euro Pound (EUR/GBP) Exchange Rate Rises as Yellow Vest Protests Move into Eleventh Week

EUR investors, meanwhile, will be focusing on the President of the European Central Bank Mario Draghi’s testimony to the EU Parliament today.

The Euro has managed to gain on the Pound today, despite last week’s disappointing data releases which showed a slip in Germany’s manufacturing and Draghi saying that risks to the Eurozone economy had ‘moved to the downside’.

The EUR/GBP exchange rate has mainly benefited from a weakening Pound amid increasing Brexit uncertainty, although continuing political volatility in France has also curbed some of the Euro’s gains, following the eleventh week of Yellow Vest protests across the country.

GBP/EUR Forecast: Pound Could Soar if Parliament Votes in Favour of Brexit ‘Plan B’

GBP/EUR traders will be focusing on the UK Parliament tomorrow, as Theresa May faces the critical vote on her Brexit ‘Plan B’ withdrawal agreement.

With no notable UK data due ahead of the vote, GBP investors will be focusing almost solely on Brexit news, with any signs that May’s deal could be rejected potentially seeing the Pound plummet against the single currency.

EUR investors, meanwhile, will be looking ahead to tomorrow’s publication of Italy’s PPI figures for December, with any signs of an increase potentially lending some further uplift for the Euro.

Tomorrow will also see the publication of French consumer confidence figures for January, which are expected to increase.