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Will the Euro Keep Dropping against the Pound with the Brexit Bill in focus?

The Euro has improved its condition against the Pound since earlier today, having climbed in the pairing after news that Eurozone inflation rose by 1.8% on the year in January. Although the monthly figure dropped by -0.8%, this has not been enough to discourage investment in the Euro over the Pound.

[Published 10:46 GMT 22/02/2017]

The Euro Pound exchange rate dipped today owing to critical analysis of the latest Greek debt deal and investors focusing on the Brexit bill. Are further EUR/GBP losses ahead?

Although German confidence data impressed, the Euro still fell against a broadly stronger Pound amid expectations the House of Lords will tag amendments to the Brexit Bill.

In February, German Ifo figures for business climate, expectations and current conditions have all risen, although this has not been enough to facilitate a Euro Pound advance.

Investors in the Euro have instead been focussing on the aftermath of the latest Greek debt agreement, which has seen officials agree to further economic reforms in exchange for the next trance of bailout money.

Concerns have recently been raised about differences of opinion between German and International Monetary Fund (IMF) officials, with the latter favouring reduced austerity measures but the former remaining stubborn about keeping the pressure on a debt-ridden Greece.

Pound-influencing data has been broadly supportive today, although ongoing House of Lords debates are also keeping GBP bolstered.

Data-wise, UK business investment fell into negative ranges on the quarter and the year in Q4, while Q4 GDP has been revised up on the quarter. Annually, Q4 GDP growth has dipped from 2.2% to 2%.

The House of Lords has also approved the Article 50 bill for a second reading, which has led the bill onto the stage where it could be amended.

German data will remain a strong influence on the Euro on Thursday, when the March GfK confidence score is due alongside GDP stats for Q4. Forecasts have been mixed, with a minor dip in consumer confidence expected alongside a pair of rises in GDP growth rates on the quarter and the year.

The Euro could also be shifted against the Pound by a trio of speeches from European Central Bank (ECB) official Peter Praet, who is due to give remarks at three events in London.

Only a Confederation of British Industry (CBI) trades figure is scheduled for release on Thursday, so the next major UK news is expected to be Friday morning’s BBA mortgage approvals stat for January. This is predicted to show a slowdown from 43.23k to 41.9k, which could result in the Pound softening at the end of the week.

Outside of this news, any signs that the Article 50 bill could be amended in the House of Lords are expected to boost Sterling demand.

Current EUR GBP Interbank Exchange Rates

At the time of writing, the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.84 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.18 today.