GPB/EUR Exchange Rate Rangebound, UK Markets Cautious as Boris Bids to Force Brexit by October Deadline
The Pound Euro (GPB/EUR) exchange rate held steady this morning, with the pairing currently trading around €1.161 as Prime Minister Boris Johnson is due to make his final bid to force through Brexit by the October 31 deadline today.
The Prime Minister will ask MPs to back him on two votes – on the withdrawal agreement, which officially sets down the UK-EU deal, and his ‘programme motion’ to force it through the House of Commons by Thursday.
Mr Johnson will say:
‘We have negotiated a new deal so that we can leave without disruption and provide a framework for a new relationship based on free trade and friendly cooperation.’
As a result, the GBP/EUR exchange rate remained subdued with Johnson generally expected to win the vote on the bill but be defeated on the programme motion which will likely be rejected by Labour MPs and few Conservatives who want more time for the deal to be passed.
Conservative MP Ken Clarke was sceptical, saying:
‘We have negotiated a new deal so that we can leave without disruption and provide a framework for a new relationship based on free trade and friendly cooperation. We are leaving the European Union but we will always be European.’
In UK economic news, today will see the release of September’s public sector net borrowing figure, which is expected to rise from £5.766 billion to £8.800 billion. However, with Brexit developments dominating headlines, this will have little effect on Pound movement.
EUR/GBP Exchange Rate Steady, ECB Meeting in Focus
The Euro (EUR) held steady against the Pound (GBP) today with the European Central Bank’s (ECB) meeting being the President of the ECB, Mario Draghi’s, last formal meeting as governor. However, with the meeting focusing on financial adjustments, European markets are remaining cautious on fears of imminent rate movement.
This follow’s last month’s meeting in which monetary policy was introduced with a reintroduction of quantities easing and a raft of stimulus measures to boost the ailing Eurozone economy.
Carsten Bzeski, Chief Economist at ING, was sceptical, however, saying:
‘As this will be Mario Draghi’s last meeting at the ECB and as there have been no significant changes to the economic situation, we don’t expect any hints at future measures. Instead, Draghi will try to stress the ECB’s determination to act in the future.’
GBP/EUR Outlook: Could Sterling Rise if Boris Secures Brexit Deal Majority?
Euro investors will be looking ahead to tomorrow’s release of October’s French business climate figure, which is expected to hold at 102.
Tomorrow will also see the release of October’s flash Eurozone consumer confidence figure which is, however, expected to ease from -6.5 to -6.7, and could provide further downward pressure on the Euro.
Meanwhile, Sterling traders will be awaiting tomorrow’s release of September’s UK BBA mortgage approvals figure.
The GBP/EUR exchange rate will, however, continue to be driven by Brexit developments. Any signs of Boris Johnson succeeding in getting his Brexit deal through could buoy market confidence in the Pound, as this would effectively eliminate a no-deal on Thursday next week.