GBP EUR Exchange Rate Plummets as Markets Anticipate Downbeat Autumn Statement

November 23, 2016 - Written by Frank Davies

STORY LINK GBP EUR Exchange Rate Plummets as Markets Anticipate Downbeat Autumn Statement

The GBP EUR exchange rate continued to decline this morning as markets forecast a downbeat Autumn Statement from Chancellor Philip Hammond this afternoon as it reflects the challenges the UK faces in 'Brexit'.

Pound Euro (GBP EUR) Exchange Rate Slides as Investors Predict Gloomy Autumn Statement

The Pound Euro (GBP EUR) exchange rate has dropped ahead of the release of Hammond’s first Autumn Statement, with markets expecting a gloomy outlook from the Chancellor as he prepares the British economy to face the uncertainty of 'Brexit'.

Analysts predict that the New Chancellor will deviate from the economic targets of his predecessor, George Osborne, rejecting plans to balance the budget by the end of the current government as he gives public finances more freedom to deal with any issues that arise from the UK leaving the EU.

This has added pressure to Sterling as concerned investors worry that the UK’s ever bludgeoning budget deficit looks likely to rise even further, adding to an estimated £100bilion ‘black hole’ that looms over the UK economy.

However Market sentiment may be slightly improved by the announcement of a predicted £1billion digital infrastructure project, which will help introduce 5G mobile access and increase the availability of superfast broadband for businesses. Helping to further promote the UK as a leader in the tech sector after Google and Facebook recently announced they would be making substantial investments in their UK operations.

Impressive Eurozone PMI Strengthens Euro (EUR)

The Euro increased its gains against the Pound this morning after the release of the latest European PMI reports.

Eurozone Manufacturing saw a moderate rise from 53.5 to 53.7 in November, impressing investors after it was predicted to slide to 53.3. Meanwhile the Service report saw figures rocket past expectation that it would only rise from 52.8 to 52.9 as it soared to 54.1.

However the single currency’s advance is likely to be muted thanks to a slight decline in Germany’s Composite PMI report which saw a slight decline from 55.1 to 54.9, stoking fears of a slowdown in Europe’s largest economy.

GBP EUR Exchange Rate Forecast: British GDP Data Scheduled for Friday

The GBP EUR exchange rate may improve on Friday with the release of Britain’s latest GDP report which is expected to see a slight rise.

Markets forecast that the latest figures will show a notable increase from 2.1% to 2.3%, helping to alleviate fears of that the UK economy has suffered since the vote to leave the EU.

However a decline could prove disastrous for the Pound as traders are already worried about a potential slowdown in the UK economy after 'Brexit', so any indications that growth has already begun to decline is likely to weigh heavily on Sterling.
Meanwhile Germany will release its latest Consumer Confidence Survey on Thursday which could drag on the Euro if it doesn’t improve as forecast.

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TAGS: Currency Predictions Daily Currency Updates Euro Forecasts