GBP/EUR Exchange Rate Rangebound as MPs Return to Discuss Brexit
The Pound Euro (GBP/EUR) exchange rate is rangebound today, and is currently trading within the region of €1.1128.
The Pound (GBP) stabilised today as British MPs return to the House of Commons to debate Prime Minister Theresa May’s Brexit deal.
A more hopeful tone returned yesterday as twenty Tory MPs have backed the Finance Bill which would limit any tax changes if a Brexit ‘no-deal’ should occur, with Labour opposition leader, Jeremy Corbyn, calling it an ‘important step’.
The Euro (EUR), meanwhile, was hit by poor German trade figures today, with imports for November falling above forecast to -1.6% against October’s 0.8%, while the export figures also followed suit, showing a worse-than-expected decrease.
Carsten Brzeski, Chief Economist at ING Bank, commented:
‘There currently simply seem to be too many crises in global trade for the German export sector to defy them. Even the weak euro has done very little to lift German export performance.’
However, the Euro did manage to buffer some of these losses today with the release of its better-than-expected trade balance figures for November which increased to €19.0bn against October’s 17.9bn.
These were followed by the release of the Eurozone’s unemployment rate figures for November which showed a better-than-expected decrease to 7.9% against October’s 8.0%.
Pound investors, meanwhile, will be looking ahead the speech from Mark Carney, the Governor of the Bank of England (BoE), today with any dovish comments about the UK economy potentially weakening the Pound to Euro exchange rate.
Pound to Euro (GBP/EUR) Exchange Rate Steadies as Brexit ‘No-Deal’ Resisted by Parliament
The Pound is set to remain sensitive to any developments from the House of Commons today, with Theresa May once again rallying to bolster support for her Brexit deal, despite increasing divisions within her own party over aspects of her UK-EU withdrawal agreement.
A mounting campaign against a ‘no-deal’ Brexit is increasingly highlighting the division between the UK government and Parliament, with the former Tory minister Nick Boles, commenting:
‘We’ll be seeking to use any and every opportunity to show that Parliament will not allow a no-deal Brexit. This is a single skirmish in a long campaign.’
Pound investors, however, have been buoyed after MPs are increasingly attempting to prevent a chaotic Brexit scenario, which has stabilised Sterling in what otherwise could have been a very volatile period as Brexit debates heat up.
GBP/EUR Forecast: Brexit Debates Expected to Heat Up
GBP investors will be looking ahead to tomorrow’s release of the UK’s year-on-year BRC like-for-like retail sales for December which are expected to decrease.
These will be followed by the release of the BoE’s release of its credit conditions survey, with any signs bullishness in the UK economy potentially bolstering Sterling.
Thursday meanwhile will see the release of the UK’s gross domestic product figures for November, with any signs of a decrease potentially dampening Pound sentiment.
Also on Thursday will see the release of Germany’s ZEW survey on economic sentiment for January.
The Pound may face further volatility in the coming week as Brexit debates continue, ahead of the 15 January vote which could see the GBP/EUR exchange rate fluctuate.