GBP/EUR Exchange Rate Slumps as Progress in Cross-Party Remains Limited
The Pound Euro (GBP/EUR) exchange rate has fallen back this morning, with the pairing having given up all of its gains from Friday as concerns over the lack of progress in cross-party Brexit talks mount.
At the time of writing the GBP/EUR exchange rate is down roughly 0.5% so far today, with the pairing on track to fall back below €1.16.
Pound (GBP) Tumbles as Cross-Party Talks Stall
The Pound (GBP) remained on the defensive against the Euro (EUR) and the majority of its other peers this morning as it continued to be undermined by Brexit concerns.
This comes as GBP investors express their disappointment regarding the lack progress in cross-party Brexit talks, with labour sources suggesting that the government remains reluctant to re-draw its red lines.
Further limiting the appeal of Sterling are also the questions that continue to hang over Theresa May’s premiership, with the PM facing growing calls to step down.
Euro (EUR) Boosted by Robust German Industrial Production
At the same time, the euro enjoyed a boost this morning, courtesy of Germany’s latest industrial production figures.
According to data published by Destatis, German industrial production expanded by 0.5% in March, up from a revised 0.4% in February and beating forecasts of a 0.5% contraction.
This will be an encouraging sign for EUR investors, with the robust industrial output, boosting optimism that Germany’s upcoming GDP figures will be more positive than initially thought.
GBP/EUR Exchange Rate Forecast: Will a Surge in UK GDP Help Sterling to Bounce Back?
Looking ahead, barring any major Brexit developments, we are likely to see the Pound Euro (GBP/EUR) exchange rate bounce back at the end of this week’s session as the UK publishes its latest GDP report.
Economists forecast Friday’s data will show that UK growth rebounded in in the first quarter, jumping from 0.2% to 0.5% and likely lifting Sterling.
However any gains in GBP exchange rates may be capped somewhat by the accompanying investment figures, with ongoing Brexit uncertainty set to see business investment contract for the fifth consecutive quarter at the start of 2019.
In the meantime we may see the Euro show some weakness if European Central Bank (ECB) President Mario Draghi continues to warn of downside risks facing the Eurozone in a speech on Wednesday afternoon.