GBP/EUR Exchange Rate Steady on ECB Stimulus Package Hopes
The Pound to Euro (GBP/EUR) exchange rate held steady today, with the pairing currently trading around €1.117.
The Euro (EUR) fell today following a speech from the European Central Bank’s President (ECB) Christine Lagarde who pledged a stimulus response package for next month.
Concerning the Eurozone’s economic outlook, she said that while the Covid-19 vaccine news had been ‘encouraging’ there was no reason to hold back on supporting the bloc’s economy.
‘The key challenge for policy makers will be to bridge the gap until vaccination is well advanced and the recovery can build its own momentum. It is thus more important than ever for monetary policy and fiscal policy to keep working hand in hand.’
In Eurozone economic data, today saw the release of the latest Construction Output data for September, which fell to 2.9% month-on-month.
However, with Europe facing a concerning rise of Covid-19 cases along with America, EUR traders becoming increasingly jittery about the Eurozone’s economy.
Pound (GBP) Steady as Hopes of UK-Canada Trade Deal Rise
The Pound (GBP) held steady against many of its peers today on renewed hopes that UK could secure a post-Brexit trade deal with Canada.
Consequently, this has buoyed optimism in the UK’s economy for 2021 as relations between the UK and Canada had previously been uncertain.
However, with no UK economic data due for release today, GBP traders are focusing on UK-EU developments towards a trade agreement.
Meanwhile, UK markets are showing signs of improving following news that the percentage of people testing positive for Covid-19 in the UK has fallen for the first time since August.
As a result, the GBP/EUR exchange rate stabilised on hopes for the British economy despite uncertainty over Brexit.
Analysts at the UK accountancy firm KPMG, however, have highlighted the possibility of the UK’s growth halving if the UK left without a post-Brexit deal.
GBP/EUR Outlook: Could Falling Eurozone Consumer Confidence Weigh on the Single Currency?
Euro (EUR) investors will be awaiting tomorrow’s release of the Eurozone’s flash Consumer Confidence report for November.
However, with the figure expected to fall to -17.7, EUR traders are likely to become increasingly concerned about the bloc’s economic performance.
Tomorrow will also see Christine Lagarde deliver another speech.
Again, if she is downbeat in her commentary on the Eurozone’s economy, we could see the single currency fall.
Pound (GBP) traders will be monitoring tomorrow’s release of November’s UK Consumer Confidence report and October’s Retail Sales.
Any significant downturn in the British economy’s outlook would be GBP-negative.
The GBP/EUR exchange rate will continue to be driven by the UK’s Covid-19 situation and Brexit news.
If hopes of a post-Brexit trade agreement with the European Union increases, however, we could see Sterling rise.