Pound to Euro Exchange Rate Volatility Intensifies amid Brexit Uncertainty
Update 16:17 BST 01/20/2020:
The Pound Sterling to Euro (GBP/EUR) exchange rate has spent today’s session fluctuating widely.
GBP/EUR briefly dipped to a low of 1.0930 before rebounding to a high of 1.1033. Then towards the end of the day, GBP/EUR slipped again and trended closer to the level of 1.0963.
It came amid mixed reports over how UK-EU Brexit negotiations were progressing.
Some reports claimed that negotiators were still too far apart in key issues, but others later reported that officials were increasingly optimistic about a deal still being possible.
Overall, this uncertainty kept the Pound under pressure.
(Originally published 09:40 BST 01/10/2020)
Pound to Euro Exchange Rate Higher after Quarter-End Flows
The Pound Sterling to Euro (GBP/EUR) exchange rate advanced yesterday, but uncertainty over the Brexit process is keeping the pair jittery. The final round of UK-EU Brexit negotiations is expected to end over the coming day, leaving markets tense.
After last week’s mixed movement, GBP/EUR has been trending with a more upside bias this week. GBP/EUR opened the week at the level of 1.0953 and has been generally trending half a cent higher.
GBP/EUR rebounded from a dip yesterday evening. At the time of writing, GBP/EUR is once again slipping from the week’s higher level and trends in the region of 1.0985.
Anticipation for Brexit developments is likely to be the focus for the Pound to Euro exchange rate outlook in the coming sessions.
Pound (GBP) Exchange Rate Slips Back from Quarter-End Movement
Yesterday saw investors buy the Pound (GBP) as markets adjusted positions for the end of Q3. The Pound moved higher before markets closed and trended higher until this morning.
According to Derek Halpenny, Head of Research at MUFG:
‘It’s month end, it’s quarter end, and you’re in very dangerous territory when you’re trying to find a fundamental explanation to spot moves in the afternoon of that final trading session,’
This morning though, the Pound is sliding. Sentiment on the British currency is not strong enough as investors await Brexit developments.
The final round of scheduled UK-EU Brexit negotiations is expected to end before the end of the week. Concerns that there will not be any breakthrough are keeping the Pound under pressure.
Euro (EUR) Exchange Rates See Little Shift as Eurozone Manufacturing Meets Forecasts
Investors have had little reason to shift positions on the Euro (EUR) today. The Eurozone’s latest ecostats were largely unsurprising and did not have much impact on the Eurozone outlook.
Eurozone manufacturing PMI data from September was published this morning. France’s manufacturing data beat forecasts, while Germany’s fell slightly short.
Overall though, the Eurozone’s manufacturing PMI met projections, coming in at 53.7.
Demand for the Euro remains limited overall. The Eurozone’s coronavirus outlook has been worsening in recent weeks, and the Euro’s rival the US Dollar (USD) has been surging on safe haven demand.
Pound to Euro (GBP/EUR) Exchange Rate Awaits Outcome of Brexit Talks
While there have been little major developments thus far this week, the final scheduled round of UK-EU Brexit negotiations is still set to end tomorrow.
If there is an optimistic delay or even a breakthrough in talks, the Pound outlook could surge as hopes of a Brexit deal being reached would soar.
However if talks collapse or there is no sign of progress in what is being seen as one of the last chances for it, the Pound could shed much of its recent advances.
The Pound outlook remains jittery on coronavirus and UK economic uncertainties as well.
While Brexit news is likely to dominate GBP/EUR movement in the coming sessions, tomorrow’s Eurozone data could prove influential as well.
Eurozone inflation data and a speech from European Central Bank (ECB) Vice President Luis de Guindos could cause some Euro movement before the end of the week.
Of course, the European coronavirus situation will also be closely watched by Pound to Euro (GBP/EUR) exchange rate investors.