GBP/EUR Exchange Rate Flat as Chinese Economic Data Eases Global Growth Fears
The Pound Euro (GBP/EUR) exchange rate is steady today and is currently trading around €1.1583 on the inter-bank market.
The Euro (EUR) stabilised against the Pound (GBP) as traders have fled to riskier currencies following heightening US-China trade deal hopes today, as the two superpowers are nearing a promising consensus.
Risk-appetite has also increased following encouraging Chinese economic data, which has eased fears over the global economy.
Brexit concerns have also weighed on the Euro, with Dominique Strauss-Kahn, the former heard of the International Monetary Fund (IMF) criticising the UK for its drag on the European project.
‘[The UK’s] actions have only aimed at slowing the European project, according to what they judge to be their interests. Without them, the Union today would have advanced much further, been much stronger and much more united.’
The Pound has stabilised on a general lack of Brexit news ahead of the parliamentary Easter recess, which will see many MPs absent from talks.
However, cross-party talks between the Conservatives and Labour are due to continue, with hopes rising that this may break the political deadlock.
GBP/EUR Exchange Rate Steadies as UK House Prices Rise
Today saw the publication of the UK Rightmove House Price Index figures for April, which came in at an impressive 1.1%.
Miles Shipside, a Director at Rightmove, commented:
‘The rise in new seller asking prices reflects growing activity as the market builds momentum, egged on by the arrival of Easter. [The Brexit extension is] a window of relative certainty in uncertain times.’
With cross-party talks ongoing, and David Lidington, Prime Minister Theresa May’s de facto deputy, saying that the two parties are still ‘testing ideas’, many Pound traders have remained cautious.
Lidington provided a mixed signal from Downing Street, saying that talks were progressing positively, while he felt that the question hanging over Brexit could not ‘drag out for much longer’.
Conservative MP Iain Duncan Smith remained generally pessimistic, saying:
‘We need to be very clear in the course of this that we don’t end up letting Jeremy Corbyn dictate to us that we stay in a customs union, or we have some kind of second referendum, or stay aligned with the European single market – all of that given to us by Jeremy Corbyn is a recipe for disaster.’
GBP/EUR Forecast: Sterling Could Rise on Cross-Party Brexit Solution
Sterling traders will be looking ahead to tomorrow’s release of the UK ILO unemployment rate figures for February, which are expected to remain unmoved.
These will be followed by the UK average earnings excluding bonus figures for February.
Euro investors, meanwhile, will be looking ahead to the release of Germany’s ZEW Survey of economic sentiment for April, which is generally expected to improve, along with the Eurozone’s overall economic sentiment.
The GBP/EUR exchange rate will be dictated by Brexit talks this week, and with any indication of a cross-party consensus emerging, this could prove beneficial for the Pound.