EUR/GBP Exchange Rate Falls as PM Outlines Resignation with ‘Regret’ Over Brexit
The Euro Pound (EUR/GBP) exchange rate is down today and is currently trading around €0.881 on the interbank market.
The Pound (GBP) edged higher against the Euro (EUR) following news that Prime Minister Theresa May would resign as the leader of the Conservative Party as of 7 June, saying that it was with ‘regret . . . that I have not been able to deliver Brexit’.
Margot James, the Business Minister, defended Mrs May, saying:
‘It’s all very regrettable, but she’s being hounded out of office because parliament will not make a decision and the parties just have an inability to compromise. But in the end there’s got to be a compromise.’
Today saw the publication of the UK retail sales figures for April, which eased to 0.0% against Marche’s 1.2% – providing little benefit for the Pound.
Meanwhile, the annual retail sales figures increased by 5.2%, exceeding expectations and providing some uplift for the GBP/EUR exchange rate.
EUR/GBP Exchange Rate Decreases on Gloomy Eurozone Forecasts
The Euro, meanwhile, has continued to struggle after yesterday’s disappointing German data, following the further contraction of the flash German manufacturing PMI figures for May.
Phil Smith, a Principal Economist at IHS Markit was gloomy about the Eurozone’s economy, saying:
‘It is manufacturers who remain the most downbeat about the outlook amid lingering global trade tensions, though the survey highlights that fears of a slowdown may have started to spread to services, where confidence is now at its joint-lowest since 2014.’
Euro traders have been focusing on the ongoing European elections this week, with yesterday’s vote in the UK causing increasing concern, as the Brexit Party continued to gain favour in polls over the two major parties, the Labour Party and the Conservatives.
The single currency is increasingly losing favour as traders remain worried that various Eurosceptic parties, and Matteo Salvini, the Deputy Prime Minister of Italy, could threaten the integrity of the European Union.
EUR/GBP Outlook: Brexit and UK Leadership to Remain in Focus
Pound traders will be looking ahead to Tuesday next week, with Monday being the Spring Bank Holiday.
Tuesday will see the UK inflation report hearings, and with any signs of bullishness about the UK economy, this could see the Pound rise higher against the single currency.
Euro traders, meanwhile, will be looking ahead to the German GFK Consumer Confidence Survey for June, which is expected to ease.
The Pound Euro exchange rate will be driven by Brexit developments into the coming week, but with uncertainty rising around the new leader of the Conservative Party, and the course the UK-EU withdrawal will take, the Pound could become unsteady on increased no-deal fears.