GBP/EUR Exchange Rate Holds Steady on Johnson-Corbyn Debate Stalemate
The Pound Euro (GBP/EUR) exchange rate held steady today, with the pairing currently trading around €1.166 following last night’s UK election debate between Prime Minister Boris Johnson. A flash opinion poll by YouGov indicated only a modest ‘win’ for Johnson by 51% to 49%.
YouGov said in its report:
‘With the Prime Minister clearly attempting to tie every part of the debate back to Brexit – even offering to leave a copy of his Brexit deal under Jeremy Corbyn’s Christmas tree – he will be pleased to find he is seen as having performed better on the topic of Brexit.’
UK investors are feeling relieved today, with the Conservatives still retaining its sizable lead over the Labour Party and returning market confidence in political stability leaving the GBP/EUR exchange rate unmoved.
However, with a row erupting over the Conservative Party’s renaming of one of its Twitter accounts ‘factcheckUK’ during the debate, Pound investors are remaining cautious as this could clip the Tory’s lead in the opinion polls.
With no UK economic data due out today, UK political developments ahead of the 12th December general election will continue to drive the GBP/EUR exchange rate.
EUR/GBP Exchange Rate Rangebound, ECB Chief Economies Rules Out Eurozone Recession
The Euro (EUR) held steady against the Pound (GBP) after Philip Lane, the European Central Bank’s (ECB) Chief Economist, ruled out a Eurozone recession and said he expects the economy to recover in the next year or two.
In an interview for Italian daily newspaper, la Repubblica, Lane said:
‘The economy is growing less quickly than what we hoped. The dynamic is disappointing but not negative. We expect a recovery in the next year or two.’
Meanwhile, ECB President Bostjan Vasle added that the bank’s recent stimulus package was improving the Eurozone’s economy, but that it required more fiscal support from governments to improve its growth outlook.
Today saw the ECB’s financial stability review, which indicated worrying growth prospects for the bloc’s economy and prevented the single currency from rising against Sterling this morning.
The ECB said in its statement:
‘Bank profitability prospects have weakened against the backdrop of the deteriorating growth outlook and the low interest rate environment, especially for banks also facing structural cost and income challenges.’
GBP/EUR Outlook: ECB Monetary Policy in Focus
Sterling investors will be looking ahead to tomorrow’s release of October’s Public Sector Net Borrowing figure, with any signs of improving boosting market confidence in the Pound.
Euro (EUR) traders will be awaiting tomorrow’s ECB Monetary Policy Meeting Accounts, which could weigh on the single currency if the bank takes a dovish outlook on the Eurozone’s economy.
Tomorrow will also see the Vice-President of the ECB, Luis De Guindos, deliver a speech. Investors will be paying close attention to any comments on the bank’s monetary policy going forward.
The GBP/EUR exchange rate will continue to be driven by political developments for the rest of this week.
Any indications that the Tories could begin to lose some of their lead on the Labour Party in the polls weakening Sterling on heightened political uncertainty ahead of December’s election.