GBP/EUR Exchange Rate Rangebound, UK December Election Predictions in Focus
The Pound Euro (GBP/EUR) exchange rate held steady today, with the pairing currently trading around €1.161 following this morning’s release of the UK Manufacturing PMI for October, which remained mired in contraction territory at 49.6.
Rob Dobson, Director at IHS Markit, was downbeat in his assessment, commenting:
‘With a further Brexit extension confirmed and the prospect of a December general election, it looks as if the spectre of uncertainty will cast its shadow over manufacturing for the remainder of 2019.’
However, this left the Pound unmoved against the Euro, with markets focusing on the upcoming December general election instead.
UK political developments continue to remain in focus today, with the latest Yougov polls showing the Tories with a clear 15 point lead over Labour offering a morning boost to the Pound. US President Donald Trump also waded into election news by urging co-operation between the Brexit Party and the Conservatives.
Sterling traders became jittery, however, when Trump went on to rule out the possibility of a US-UK trade deal due to “certain aspects” of Boris Johnson’s current agreement with the European Union, leaving the GBP/EUR exchange rate treading water.
EUR/GBP Exchange Rate Flat, Europe Economy Woes Hold Back Euro
The Euro (EUR) failed to gain on the Pound today due to a lack of influential Eurozone data and French markets being closed for the bank holiday, All Saints Day.
European markets remain jittery, with economic woes continuing to haunt European markets as analysts fail to offer any firm predictions on whether the US and China will secure “phase one” of their trade deal this month.
Bert Colijn, Senior Economist at the financial services company ING, commented:
‘The months ahead are likely to remain tricky for the Eurozone… [The fourth quarter] is off to a rough start and while recent news about global economic risks like the [US-China] trade war and Brexit have been promising, downside risks remain for the moment.’
With Brexit effectively paused ahead of December’s general election, the Euro is struggling to gain market appeal today, with Brexit uncertainty also placing downward pressure on the Pound.
GBP/EUR Outlook: Could Sterling Rise on Improved UK Services PMI?
Euro traders will be looking ahead to Monday’s release of the German Manufacturing PMI for October, which is expected to remain in contraction territory at 41.9.
Meanwhile, the publication of October’s Markit Construction PMI will provide some focus for Sterling investors on Monday.
We could see the GBP/EUR exchange rate improve on Tuesday if the UK’s Markit Services PMI for October meets predictions and rises from 49.5 to 50.
However, UK political developments will likely remain in focus next week, with the three major parties due to launch their 2019 election campaign strategy on Wednesday.