The Pound extended its gains against the Euro this afternoon, rising from around 1.1605 to 1.1629 as the latest Eurozone Consumer Confidence report fell short of expectations, with it being undermined by rising political uncertainty across Europe. (Updated 16.40 GMT 23.01.17)
The GBP EUR exchange rate rose at the start of this week’s session as analysts expect the UK Supreme Court to uphold a High Court decision to block the triggering of Article 50 without a vote in parliament.
After dropping fairly dramatically at the beginning of last week, the Pound enjoyed a rebound following Theresa May’s Brexit speech and further GBP gains could be on the horizon in the days ahead.
As it stands, GBP EUR is trading in the region of 1.16.
Supreme Court Speculation Causes Uptick in Pound Euro (GBP EUR)
The Pound appreciated this morning ahead of the Supreme Court judgement tomorrow on whether the British government will be able to trigger Article 50 without facing a vote in parliament.
While the ruling’s importance was reduced by Theresa May’s speech last week, in which she promised to allow MPs a vote on the final terms of the government’s ‘Brexit’ deal, Sterling is still likely to rise should the Court rule against the government as it hinders its attempts to purse a ‘hard Brexit’.
However the Pound’s gains may be muted as Labour Leader, Jeremy Corbyn is reportedly set to tell his party to back Article 50 should it come to a vote, saying;
‘I have made it very clear that the Labour Party accepts and respects the decision of the British people. We will not block Article 50.’
Euro (EUR) Dampened by Draghi Letter
The Euro remained on the back foot this morning following a letter from European Central Bank President Mario Draghi to two Italian lawmakers in the European Parliament late on Friday.
The letter set out conditions for any country leaving the Eurozone, saying that they must settle its debts before separating from the union.
This is a clear turnaround from his stance a few years ago where he boldly stated there was no plan for nations leaving the currency bloc, with the letter fuelling speculation that growing discontent in the Eurozone and EU could lead to more members following Britain’s lead to leave.
GBP EUR Exchange Rate Forecast: UK Public Sector Borrowing Report Ahead
Excluding the Supreme Court ruling, GBP EUR exchange rate movement tomorrow may be dictated by the UK’s Public Sector Borrowing figures, with the Pound likely to rise if the nation’s deficit falls from -£12.21bn to -£7.2bn.
Meanwhile, the Euro may rally on Tuesday with the release of Germany’s latest PMI data with the single currency likely to strengthen if the data impresses.
Current Interbank Exchange Rates
At the time of writing the GBP EUR exchange rate was trending around 1.16 and the EUR GBP exchange rate was trending around 0.86.
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