Could Government’s Brexit Plans Push GBP/EUR Exchange Rate Down?
The Pound (GBP) has made a minor decline against the Euro (EUR) today, as Sterling traders continue to worry about the effects of a no-deal Brexit on the UK economy.
This could come to a head on Thursday, when the UK government will reportedly be releasing impact papers that detail contingency plans for a no-deal Brexit.
On the one hand, these papers could reassure GBP traders that Brexit won’t be as bad as expected and cause a Pound to Euro (GBP/EUR) exchange rate recovery.
The negative outcome would be the Pound falling further against the Euro on the news; this might happen if GBP traders focus on the possibility of a no-deal Brexit.
As the papers detail plans to respond to a no-deal Brexit, this would imply that the government believes that such an outcome is a distinct possibility.
Leaving the EU without any kind of deal is largely seen as the worst possible outcome, so a reminder of the high stakes in Brexit negotiations could unsettle Pound traders.
Negative UK Consumer Confidence Reading could Cause GBP/EUR Exchange Rate Losses
Beyond this week’s Brexit news, the Pound to Euro exchange rate (GBP/EUR) could next be affected by a GfK consumer confidence reading out on 31st August.
This reading previously showed that a majority of respondents were pessimistic, with a -10 point printing in July.
Current predictions are for this measure to improve slightly, with a shift to -9 points in August.
While technically positive news, a continued negative reading could still lead to Pound Sterling losses as it would mean no major improvement in sentiment levels.
Euro to Pound Exchange Rate Forecast: Will EUR/GBP Gains Come from Eurozone PMI Growth?
The Euro (EUR) might be able to rise further against the Pound (GBP) before the end of the week, if Thursday’s Eurozone PMI readings show significant growth.
The morning will bring German and Eurozone-wide PMI estimates for August, covering services and manufacturing sector activity along with overall readings.
A minor manufacturing sector slowdown is anticipated, but beyond this services sector and overall economic growth has been anticipated.
Such results could raise demand for the Euro and lead to greater EUR/GBP exchange rate gains.
Future EUR/GBP Forecast: Will German GDP Stats Push Euro to Pound Exchange Rate Higher?
Another Eurozone data release which could improve the Euro to Pound Sterling exchange rate (EUR/GBP) will be Friday morning’s German GDP growth rate figures.
These finalised stats will cover recorded growth in Q2 2018 and might to trigger an additional Euro rise against the Pound.
A quarter-on-quarter rise from 0.4% to 0.5% is expected, although the annual growth reading is tipped to slow from 2.1% to 2%.
If the year-on-year figure defies predictions and shows an above-forecast rise, the Euro could trade higher against the Pound.
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