Pound to Euro Exchange Rate Steadier Near Month and a Half Worst
After falling for almost three straight sessions, the Pound Sterling to Euro (GBP/EUR) exchange rate steadied yesterday evening. The pair is still struggling to see much support though, and now analysts look to today’s anticipated European Central Bank (ECB) policy decision.
Last week saw GBP/EUR recoil from its best levels. After opening this week at the level of 1.1216, GBP/EUR has only seen deeper losses on the back of revived no-deal Brexit fears.
GBP/EUR touched on a low of 1.0957 yesterday. This was the worst level for the pair in around a month and a half, since late-July. The pair has since steadied slightly higher and currently trends in the region of 1.1000.
No-deal Brexit fears keep pressure over the Pound (GBP) outlook. However, today’s upcoming ECB policy decision could influence the Euro (EUR) outlook and the direction of GBP/EUR.
Pound (GBP) Exchange Rate Losses Slow after Days-Long Plummet
Since markets opened this week, the Pound (GBP) has been sold across the board.
Sterling’s steep selloffs came in response to news that the UK government was planning to rewrite its Brexit withdrawal agreement. The move was criticised as a potentially illegal move that could threaten Brexit negotiations.
The Pound was in freefall until yesterday, when the British currency found a little support in the comments from EU officials. EU officials said they would not walk away from negotiations despite the UK government’s actions.
Still, no notable recovery has taken place. The UK government has not moved back on its plans and it continues to see condemnation across the political spectrum.
One Conservative backbencher, Sir Roger Gale, said ‘Put simply, I will not vote to break the law.’
Euro (EUR) Exchange Rates Firm Ahead of European Central Bank (ECB) Decision
The Euro has steadied in recent sessions, despite concerns of a more dovish European Central Bank (ECB).
It follows last week, when the Euro recoiled from its best levels. The recoil was due to a combination of US Dollar (USD) strength, and rising Eurozone coronavirus jitters.
The selloff has ended this week though, and the Euro has actually been firming instead. This is despite wide speculation that the ECB will attempt to talk down the recent strength of the currency.
Speculation that the ECB might actually become more confident in a Eurozone recovery from the coronavirus pandemic is also helping the Euro.
Pound to Euro (GBP/EUR) Exchange Rate Awaits European Central Bank (ECB) Policy Decision
The Pound has seen significant losses this week, but the Pound to Euro exchange rate could climb again if the Euro tumbles on today’s European Central Bank (ECB) news.
In what is likely to be the biggest news for Euro investors this week, the ECB could become more dovish but could also strike a surprisingly optimistic tone.
For example, if the ECB ramps up warnings about the Euro’s strength or hints at looser monetary policy, the Euro could weaken.
The Euro may strengthen instead if the ECB focuses on optimism for a Eurozone economic recovery.
While reaction to the ECB news could drive the Euro through the end of the week though, Pound investors will be focused on Brexit developments.
The penultimate round of UK-EU Brexit negotiations are taking place this week. If no-deal Brexit fears worsen, the Pound is likely to see even deeper losses.
Friday’s key UK growth rate report could also influence the Pound to Euro (GBP/EUR) exchange rate outlook if it surprises investors.