GBP/EUR Exchange Rate Rangebound as French Industrial Output Improves
The Pound Euro (GBP/EUR) exchange rate steadied today and is currently trading around €1.1602 on the inter-bank market.
The Euro (EUR) stabilised against the Pound (GBP) today following the publication of the French industrial output figures for February, which increased above expectation to 0.4%.
These were followed by the Italian industrial output figures for February, also exceeding expectations and climbing to 0.8%.
Many Euro traders, however, are awaiting the European Central Bank’s (ECB) interest rate decision this afternoon, which is expected to hold steady.
David Powell, a Senior Euro-Area Economist at Bloomberg, remained pessimistic however, saying:
‘The list of strains on the economy is long and there’s no room for complacency, especially as global conditions are no longer as supportive.’
Pound Euro (GBP/EUR) Exchange Rate Flat as UK GDP Figures Rise Above Forecast
Sterling was buoyed by better-than-expected UK GDP figures for February which rose to 0.2%, despite the 0.0% forecast. This was the best result since 2017.
Following on from these were encouraging UK manufacturing production figures for February, which shot up above expectation to 0.9%.
The Office for National Statistics were optimistic, saying:
‘Following a period of contraction, output in production and manufacturing has risen for the second month in a row, the latter driven by domestic demand. Manufacturing is now at its highest level since April 2008.’
Brexit news has, however, weighed on the Sterling today with the President of the European Council, Donald Tusk, essentially rejecting Prime Minister Theresa May’s delay for a shorter request and suggesting a longer delay from up to a year.
Tusk criticised the political deadlock in the UK, saying:
‘[Our] experience so far, as well as the deep divisions within the House of Commons, give us little reason to believe that the ratification process can be completed by the end of June.’
However, this evening’s important emergency EU summit will determine the conditions for a delay to Brexit, and any indications that could be granted would provide huge relief for Pound traders.
GBP/EUR Forecast: Sterling Could Soar on Long Brexit Extension News
Euro traders will be awaiting the publication of the German Harmonised Index of Consumer Prices figures for March tomorrow, which are expected to hold steady.
Pound investors, meanwhile, will be looking ahead to tomorrow’s RICS House Price Balance figures for March, and as they are expected to improve, this could provide some uplift for Sterling.
The GBP/EUR exchange rate, however, will be determined by the outcome of tonight’s important EU summit, and if the UK is granted a long extension to Brexit this could see Sterling soar as no-deal Brexit fears recede.