GBP/EUR Exchange Rate Muted as Brexit Concerns Rise
The Pound Euro (GBP/EUR) exchange rate is rangebound today, with the pairing nursing its recent losses amid heightened fears of a no-deal Brexit.
At the time of writing the GBP/EUR exchange rate is virtually unchanged this morning, leaving the pairing trading at around €1.1055, just shy of a seven month low.
Pound (GBP) to Strike Even Lower as we Approach Brexit Cliff Edge?
The Pound (GBP) has suffered a spectacular fall from grace over the past few months, with the GBP/EUR exchange rates having plummeted five cents since mid-May.
This sell-off Sterling is in direct correlation with growing fears of a no-deal Brexit, the apparent risk of which has soared during Conservative leadership election as both candidates struck a hard stance on the ideas of extending the Brexit deadline again.
However analysts suggest that the worst may be yet to come, with the Pound likely to slump even further in the coming months as the UK hurtles towards a no-deal Brexit at the same time that the Bank of England prepares to ease its monetary policy.
Stephen Innes, Head of Trading and Market Strategy at Vanguard Markets warns:
‘With markets still underestimating a hard Brexit and a potentially dovish Bank of England the Pound will remain extremely vulnerable in a dynamic shift to a ‘no-deal’ stance from Brussels before the autumn.’
Meanwhile, the Euro (EUR) was left muted on Wednesday morning as the continued gloom surrounding the Eurozone limited the appeal of the single currency.
GBP/EUR Exchange Rate Forecast: Will Slumping Retail Sales Stoke Concerns of a UK Recession?
Looking ahead, the Pound Euro (GBP/EUR) exchange rate looks poised to fall again in the second half of the week, following the publication of the UK’s latest retail sales figures
Economists forecast that sales growth will have slumped again in June, falling another 0.3%.
This is likely to be particularly damaging for Sterling sentiment as it means that sales will have contracted through the entire second quarter.
This is likely to fuel speculation that the UK economy will have slumped in the second quarter after strong consumer spending was the main driver of growth in the first quarter, with GBP exchange rates likely to tumble amid fears this could see the UK fall into a recession this year.
In the meantime, the Euro could face some pressure tomorrow morning if German PPI fell in June as forecast.