Pound Euro (GPB/EUR) Exchange Rate Strengthened After May’s Show of Brexit Optimism
The Pound Euro (GBP/EUR) exchange rate surged during Thursday’s trading session, and is currently trading at €1.1295, after Prime Minister Theresa May’s Brexit draft agreement was ‘agreed in principle’ with the EU.
Sterling (GBP) investors took comfort in May’s confident outlook, with the PM stating ‘[in the] hours ahead, I will do everything possible to deliver it [the Brexit deal] to the British people.’
The Pound is likely to remain steady against the Euro ahead of Sunday’s emergency EU-UK Brexit summit, where EU leaders will give their final verdict on the UK’s draft withdrawal deal.
GBP/EUR Boosted by 0.5% after EU-UK Brexit Deal Buoys Market Confidence
The Pound Euro (GBP) exchange rate increased around 0.5% yesterday, as Brexit optimism buoyed Sterling.
Nevertheless, there are objections from the Spanish Prime Minister, Pedro Sánchez, who is threatening to ‘veto Brexit’ over Britain’s neglect of Gibraltar in the trade deal.
GBP/EUR could experience turbulence if dissenting MPs’ voices mount against May’s Brexit deal before Sunday, increasing the threat of it being rejected before the House of Commons in mid-December.
The former Brexit Secretary Dominic Raab today criticised May’s deal on BBC Radio 4, saying:
‘I’m not going to advocate staying in the EU. But, if you just presented me terms, this deal or EU membership, because we would effectively be bound by the same rules but without the control or voice over them, yes, I think this would be even worse than that.’
Euro (EUR) Weakens Against Pound after Disappointing Eurozone Data
The Euro Pound (EUR/GPB) exchange rate came under pressure after November’s consumer confidence index was reported to have dropped to -3.9, an increase on October’s -2.7, showing a lack of confidence among consumers in the bloc.
EUR took another hit today after PMIs released by Markit Economics showed the composite for November had sunk to 52.4 – its lowest level since 2014.
This was also followed by a contraction in the services sector PMI, further denting the single currency.
EUR/GBP traders remain sensitive about Italy’s controversial budget, and investors are waiting to see whether the EC will push forward with disciplinary measures against the Eurozone’s third-largest economy.
GBP/EUR Exchange Rate Outlook: All Eyes on Sunday’s EU Summit
On Sunday an extraordinary EU Brexit summit is scheduled, meaning Sterling will potentially see some marked movement on Monday morning depending on whether the EU rubber-stamps the Brexit agreement or not.
Looking forward, next week will likely be driven by political news to an extent, although later in the week we will see the release of a raft of Eurozone economic data including consumer confidence, economic sentiment and business climate indicators, all of which has the potential to drive movement in the GBP/EUR exchange rate.