Pound Euro (GBP/EUR) Exchange Rate Dips as UK New Car Sales Falls Fastest Since Financial Crisis
The Pound Euro (GBP/EUR) exchange rate is down today by around -0.1% and is trading within the region of €1.1142.
The Pound (GBP) was weakened against the Euro (EUR) today after the release of UK’s new car sales saw their biggest year-on-year fall since the financial crisis a decade ago, with sales falling by -5.5% against last year’s -3%.
Analysts generally blamed the poor sales on Brexit uncertainty, however chief executive at the Society of Motor Manufacturers and Traders, Mike Hawes, also blamed poor consumer confidence, saying:
‘What we have been seeing over the last couple of years is a decline in business and consumer confidence, especially the confidence to buy big ticket items like a new car.’
The Euro was strengthened against the Pound today after the release of the Eurozone’s retail sales figures for November showed a stronger-than-expected increase at 0.6%, shooting over the expected 0.1% and bolstering investor confidence in the single currency.
Today also saw the printing of Germany’s retail sales figures for November which showed a stronger-than-expected increase to 1.4%, buoying confidence in Germany’s economy.
The Euro’s gains, however, were moderately clipped by today’s earlier publication of Germany’s factory orders figures for November showing a worse-than-expected decrease.
GBP/EUR Exchange Rate Falls as May Urged to Prevent ‘No-Deal’ Brexit by 200 MPs
The Pound, meanwhile, has been deflated by the return of Brexit discussion ahead of Wednesday, when MPs are set to return to the House of Commons to debate Prime Minister Theresa May’s deal.
Around 200 MPs have signed a letter to Theresa May urging her not to allow a no-deal Brexit, further exacerbating investors’ concerns in the Pound as the gap between the government and Parliament continues to show signs of widening.
However, Theresa May is showing some signs of addressing this divide, saying:
‘In the coming days what we’ll set out is not just about the EU but also about what we can do domestically . . . ; we will be setting out proposals for a greater role for Parliament as we move into the next stage of negotiations.’
GBP/EUR Forecast: Brexit Back in Spotlight
The Pound may claw back some of its losses against the Euro tomorrow if the publication of the latest Halifax house prices figures shows any sign of an increase.
Tomorrow will also see the release of a slew of Eurozone data stats, with the most significant being the business climate figures for December which are, however, expected to decrease, potentially providing Sterling with a leg-up.
These will be followed by the release of the Eurozone’s consumer confidence figures for December which are expected to remain static.
GBP investors, however, have their sights set on Wednesday when Brexit debates are due to resume, with any signs of a divided Parliament over Theresa May’s Brexit deal potentially throwing the GBP/EUR exchange rate into a state of further volatility.