The Euro Pound (EUR GBP) exchange rate was forced to cede some of last week’s gains this morning as UK political fears retreated over the weekend.
Pound (GBP) Rallies as Leadership Challenge Fears Subside
Sterling sentiment has rebounded strongly at the start of this week’s session after tumbling at the tail end of last week over concerns that Theresa May could face a potential leadership contest.
These fears were driven by calls from rebel Tory MPs for May to step down as PM following a disastrous party conference speech last week, with a group of around 30 MPs coming out in support of a new leadership contest
However these concerns were alleviated over the weekend as many prominent Conservatives spoke in support of the PM, while May herself went on the offensive in a newspaper interview as she claimed that she was not one to ‘hide from a challenge’ and that she was ‘pretty resilient’.
Euro (EUR) Tumbles despite Impressive German Industrial Data
Meanwhile the Euro tumbled today comes despite Germany’s latest Industrial Production figures beating expectations.
According to Germany’s Ministry for Economic Affairs and Energy, domestic industrial output rocketed from -0.1% to 2.6% in August, flying past expectations of a more modest rise to 0.7% and expanding at their fastest pace since 2011.
The figures are the latest in a string of strong data for the Germany, with the powerhouse economy playing a major part in the Eurozone’s impressive recovery this year.
In an accompanying statement the ministry said;
‘Since the beginning of the year, production in the manufacturing sector has shown a more vigorous upward trend, the favourable business climate and the positive trend in incoming orders are indicative of a continuation of strong industrial activity.’
EUR GBP Forecast: German Trade Surplus to Widen?
Looking ahead the EUR GBP exchange rate may recoup some of its losses on Tuesday as Germany releases its latest Trade Balance figures, with economists forecasting that the nation’s trade surplus will have grown again in August.
Meanwhile the UK will publish its own trade figures tomorrow with a potential narrowing of Britain’s trade deficit possibly helping the Pound to repel the Euro’s advances, although Sterling could still weaken if the UK’s manufacturing production slipped in August as expected.
Current Interbank Exchange Rates
At the time of writing the EUR GBP exchange rate was trending around 0.8921 and the GBP EUR exchange rate was trending around 1.1207.