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Pound Euro (GBP/EUR) Exchange Rate Steadies as Draghi is Dovish on ECB Rate Hikes

European Central Bank

GBP/EUR Exchange Rate Rangebound as Italian Business Confidence Drops

The Pound Euro (GBP/EUR) exchange rate held steady today and is currently trading around €1.1706 on the inter-bank market.

The Euro (EUR) steadied against the Pound (GBP) today following dovish comments from the President of the European Central Bank (ECB) Mario Draghi who said there could be delay to hiking interest rates.

Mr Draghi said that the ECB’s interest rates were expected ‘to remain at their present levels at least through the end of 2019.’

Today also saw the publication of the Italian business confidence figures for March, which came in lower-than-expected at 100.8, dampening confidence in Italy’s economy which continues to struggle.

Italy’s non-EU trade balance figures for February, however, increased.

The Pound meanwhile has benefited from increased hopes of the breaking of the Brexit deadlock today, as MPs head back to the House of Commons for ‘indicative votes’ which could determine the course of Prime Minister Theresa May’s withdrawal agreement.

GBP/EUR Exchange Rate Flat as Rees-Mogg and Johnson Indicate Favour for May’s Deal

Sterling is benefiting from decreasing fears of a no-deal Brexit as pro-Brexit MPs, such as Boris Johnson and Jacob Rees-Mogg, are showing increasing support for Mrs May’s deal in light of the alternatives.

Boris Johnson, one of the leading Brexiteers, commented:

‘If we vote for the PM’s lamentable withdrawal agreement we are skewered. We run the risk of either weakening the union, or else being forced to remain effectively part of the single market and customs union. But if we vote it down again there is now I think an appreciable risk that we will not leave at all.’

However, there is increasing speculation over May’s possible resignation, with chief whip Julian Smith saying:

‘If she can get a deal through, if she can leave having achieved that deal and pass on the baton to somebody else to negotiate, then I think she can leave with her head held high.’

Tonight, however, will provide an insight into MP’s preferences for Brexit, and although these will not be legally binding, they will, however, potentially indicate the next steps by Parliament.

GBP/EUR Forecast: Sterling Could Rise on May’s Deal Gaining MP’s Support

Euro traders will be looking ahead to tomorrow’s release of the German Harmonised Index of Consumer Prices for March, which are expected to decrease.

Tomorrow will also see the publication of the Eurozone’s business climate figures for March.

The GBP/EUR exchange rate, however, will remain fixated on Brexit developments this week following tonight’s important vote. And any signs that Theresa May’s Brexit deal will head for a potentially successful third ‘meaningful vote’ could provide the Pound with some much-needed uplift.