GBP/EUR Exchange Rate Flat as German Exports Fall
The Pound Euro (GBP/EUR) exchange rate is steady today and currently trading around €1.1640 on the inter-bank market.
The Euro (EUR) stabilised against the Pound (GBP) today following the publication of the German trade balance data for February, which came in at a better-than-expected €18.7bn.
Carsten Brzeski, a Chief Economist at ING, remained mixed in his response however, saying:
‘Today’s trade data is yet another disappointment for the German economy. However, chances are high that the February disappointments simply came at the trough of global uncertainties and that some improvement is in the offing.’
German export figures, however, came in weaker-than-expected at -1.3%, flagging up reason for concern for Euro traders as the German economy still shows signs of struggling.
Sterling, meanwhile, has been buoyed by renewed hopes that the Brexit deadlock could be overthrown by ‘positive’ cross-party talks between Prime Minister Theresa May and the Labour party.
There is no UK economic data due out today, with many Sterling traders focusing on Brexit developments instead.
GBP/EUR Exchange Rate Steadies as Laid-Back May Pushes for New Brexit Approach
Theresa May appeared more relaxed than usual yesterday in an informal address, delivering a reassuring message that her Government would push for a deal between the UK and the EU.
‘We absolutely must leave the European Union… that means we need to get a deal over the line and that’s why we’ve been looking for new ways – a new approach – to find an agreement in Parliament.’
However, some Sterling traders are remaining cautious as the UK is due to leave the EU on Friday this week, and if May is unable to secure a withdrawal deal that could successfully pass through Parliament, this could result in a no-deal situation.
Boris Johnson, the former Foreign Secretary, has remained severely critical of cross-party talks, saying:
‘If the UK were to commit to remaining in the customs union, it would make a total and utter nonsense of the referendum result. We would be out of the EU, but in many ways still run by the EU. It would be the worst of both worlds, not just now, but forever – and that is why I find the news so appalling that I don’t really believe it.’
GBP/EUR Forecast: Sterling Could Soar on Cross-Party Brexit Consensus
Sterling traders will be looking ahead to Wednesday which will see the emergency EU summit. Any signs that the EU could initiate an extension to Brexit would benefit Sterling, as the fears of a no-deal would recede.
Euro investors, meanwhile, will be looking ahead to tomorrow’s publication of Italian retail sales figures for February.
Wednesday will also see the important European Central Bank interest rate decision, which is expected to remain unmoved. However with any dovish statements about the state of the Eurozone’s economy, this could weaken the single currency.
The GBP/EUR exchange rate will remain focused around Brexit developments, and any indication that a cross-party consensus could form a deal that could be accepted by a parliamentary majority ahead of Friday would see the Pound soar.