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Government Argues against Article 50 Ruling, Pound Euro Exchange Rate Climbs

December 6, 2016 - Written by Ben Hughes

Pound Euro Strengthens as Government's Case is Questioned



The Pound Euro exchange rate has risen to an interbank rate of 1.18 during trading today, with Sterling making much greater gains in other currency pairings.

The source of this widespread investor optimism is thought to be the Government’s ongoing appeal in the Supreme Court to regain control of triggering Article 50.

So far, the case has come under scrutiny by judges, as the crux of the counter-argument is that legal technicalities and even single lines of law texts might enable the Government to trigger Article 50 without Parliament’s interference.

Pound Sterling Predictions: Signs of Weakening Government Argument to Bolster GBP Appeal



The Pound is expected to receive further support from the ongoing Article 50 appeal this week if the Government scrutiny persists. While this is part of the judges’ role as questioners, it nonetheless serves to seemingly erode confidence in the Government’s stand against November’s Article 50 decision.

GBP EUR exchange rate movement could also occur tomorrow morning will bring the manufacturing and industrial production stats for October, which are set to see rises in all fields but the monthly manufacturing variant.

Also out over Wednesday afternoon will be the National Institute of Economic and Social Research (NIESR) GDP estimate for November, which has a drop from 0.4% to 0.3% expected.

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Euro Pound Exchange Rate Slips after Day of Drama for EUR Traders



After an astonishing reaction to a majority of Italians voting ‘No’ to Prime Minister Matteo Renzi and constitutional reforms, the Euro has since levelled off today, dipping against the Pound and making timid movements elsewhere.

Monday’s Eurozone developments saw the Euro tank after the vote result was announced, only to rise considerably across the board after the situation rapidly stabilised. This came in spite of Renzi keeping his referendum pledge and announcing his resignation after a ‘No’ majority.

More recently, Eurozone data has consisted of Q3’s GDP growth rate, which has unexpectedly risen on the year but remained at 0.3% on the quarter.

Euro Exchange Rate Outlook: Future EUR Demand Linked to Italian Political Stability



If the Euro is to rise against the Pound in the future, announcements from Italy are expected to be crucial to future Euro valuations.

Should the nation undergo a smooth transition from the departing Renzi to a new caretaker government, the Euro is expected to firm in trading against the Pound.

More immediately, however, the next major Eurozone news will come on Thursday, when the European Central Bank (ECB) makes its interest rate decision for December.

A rate freeze at 0% is forecast, although the following press conference could provoke EUR volatility depending on how ECB President Mario Draghi reacts to Italy’s resounding ‘No’ vote.
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TAGS: Daily Currency Updates Euro Forecasts Euro Pound Forecasts

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