Home » EUR » EUR to GBP » Euro Pound Sterling (EUR/GBP) Exchange Rate Rises despite Brexit Breakthrough Hopes

Euro Pound Sterling (EUR/GBP) Exchange Rate Rises despite Brexit Breakthrough Hopes

Pound Sterling Currency Forecast

Euro Pound Sterling (EUR/GBP) Exchange Rate Increases despite Hope for Brexit Breakthrough

The Euro Pound (EUR/GBP) exchange rate rose over the course of the morning, and is currently trading at an inter-bank rate of £0.8779.

The Euro rose against the Pound despite UK Prime Minister sparking hopes that there could be a breakthrough in Brexit negotiations.

Bundesbank President Jens Weidmann this morning told an audience in Pretoria that the Eurozone is still not crisis proof and that the European Central Bank (ECB) may have to come to its rescue.

Weidman stated:

‘Certain issues like the lack of credibility of fiscal rules or the harmful sovereign-bank nexus still have to be adequately addressed.

‘[…] Acting beyond the mandate would also undermine people’s trust in the central bank. At the end of the day, it could become more and more difficult for the European Central Bank to focus on its promise of a stable currency.’

Yesterday: Pound (GBP) Slips as UK Manufacturing Falls into a Recession

The Pound fell against the Euro on Monday morning, following the release of the UK’s latest GDP figures, which showed the economy had slowed to a six-year low at the end of 2018.

Further data showed that the UK manufacturing sector had contracted for the sixth month in a row, falling into a recession.

While Brexit received its share of the blame for the slowdown of the UK’s economy, the Trade Secretary Liam Fox stated:

‘Clearly there are those who believe that Brexit is the only economic factor applying to the UK economy.

‘I think you’ll find that the predicted slowdown in a number of European economies is not disconnected from the slowdown, for example, in China.’

Euro (EUR) Rises as Eurogroup Talks up Growth Prospects

Over the course of Monday, the Euro Pound (EUR/GBP) exchange rate rose following the disappointing UK data.

At yesterday’s Eurogroup meeting, Portuguese Finance Minister Mario Centeno claimed that the fundamentals in the Eurozone were still solid, stating:

‘We also had a discussion based on the latest economic forecasts presented by the Commission. There is a mixed picture. Ministers took stock of where we are in the economic cycle. On average, there is a slowdown in the pace of growth, but the economic fundamentals are still solid and the euro area is growing, creating jobs and increasing investment.’

EUR/GBP Outlook: Will a Further Contraction in Eurozone Industrial Production Weigh on Euro?

The Euro Pound (EUR/GBP) exchange rate could continue to rise this afternoon if Bank of England Governor Mark Carney adopts a dovish tone in a speech after the disappointing UK data releases.

The UK Consumer Price Index for the month of January is due for release tomorrow, and could cause movement if there are any surprises in the cost of living.

The forecasts suggest that inflation is set to fall from 2.1% to 1.9%, which may cause the single currency to benefit from falling UK inflation.

The Eurozone industrial production figures for December are also due out tomorrow, and could cause the Euro to slip if production contracts as forecast.