GBP/EUR Exchange Rate Softens amid Recession Fears
The Pound Euro (GBP/EUR) exchange rate is softening today amid Brexit issues and social unrest in the UK, as the Euro is buoyed ahead of European Central Bank (ECB) speeches.
At time of writing the GBP/EUR exchange rate is around €1.16, a moderate drop from this morning.
Pound (GBP) Left Vulnerable amid Political and Social Strife
The Pound (GBP) may slide this week as a lack of data will likely leave Sterling sensitive to domestic developments.
Strike action and Brexit issues continue to weigh on the Pound today as barristers have joined railway workers in walk outs over pay disputes.
Parliament will be meeting today to vote on legislation to unilaterally change the Northern Ireland protocol. With a potential trade war with the EU on the cards, the Pound could see further pressure if the UK goes ahead with reneging the agreement.
With data thin on the ground for Sterling until Thursday, the Pound could be left vulnerable to market movements amid the political and social turmoil gripping the UK.
Key speeches from the Bank of England (BoE) this week could provide a boost for the Pound if the central bank offers any further indication of how it intends to bring inflation down.
Euro (EUR) Set to Strengthen Further with Hawkish ECB?
The Euro (EUR) is up against the Pound today ahead of the European Central Bank (ECB) Forum on Central Banking which begins later today.
ECB President Christine Lagarde will be delivering a speech to open the meeting, and any further hints at the central bank’s monetary policy could bolster the Euro.
With a flurry of Eurozone data this week, including the latest Euro area inflation rate, the Euro could fluctuate further. An expected jump to 8.4% in June, a fresh record high, could see the central bank take a more aggressive stance to bring inflation down, a potential boost for the Euro.
With an expected rate hike in July, the question remains as to how bold the ECB will be. As the central bank is already behind the curve in combating inflation, the Euro could see a boost if any of the speeches planned this week give any further hints as to how aggressively the ECB is willing to raise interest rates to tackle inflation.