Fears for Future UK/EU Relationship Weigh on Pound Euro Trading

December 19, 2016 - Written by John Cameron

STORY LINK Fears for Future UK/EU Relationship Weigh on Pound Euro Trading

The Pound to Euro exchange rate slipped on Tuesday afternoon. While it spent most of the day fluctuating, it was weakened later in the day by the latest Brexit comments from UK Prime Minister Theresa May.

May refused to confirm that she would allow MPs a vote on the final Brexit plan and also indicated that the UK government may ignore Scotland’s calls for a second Scottish independence referendum.

(Previously updated 19/12/2016)

The European Union has seen another unwelcome increase in internal tension after it became apparent Ireland intended to accuse the European Commission of exceeding its powers.

The EC has ruled Apple must pay €13 billion in overdue tax to the Irish government; something the Irish government desperately does not want to happen as it will undermine the country’s appeal to global corporations

(Previously updated 11:30 am)

Pound to Euro daily update: GBP EUR pairing trades poorly as concerns mount about unsatisfactory post-Brexit UK trade deal with EU

The Pound Euro exchange rate has been negative so far today, owing to the latest commentary on how the post-Brexit situation could look.

Over the weekend, International Trade Secretary Liam Fox stated that the UK might be able to remain part of the single market after Brexit, though in a partial state rather than a full one.

While this news should have boosted demand for Sterling due to its optimistic nature, the Pound failed to capitalise due to a rapid rebuttal by former Chief Executive of UK Trade and Investment Sir Andrew Cahn.

Speaking in response to Fox, Cahn stated that the UK would likely not be allowed to ‘cherry pick’ its trading status with the EU, which dampened previous optimism considerably.

Over the previous week, the Pound Euro exchange rate rose from a starting low of 1.18 to a closing high on Friday in the region of 1.19.

Euro Pound Exchange Rate Advances after Promising Start to Week’s EUR GBP Trading

The Euro Pound exchange rate has fared well against the Pound so far today, rising by 0.3% to trade in the region of 0.83.

Recent Eurozone data has supported this Euro advance against the Pound, with German Ifo scores for December all rising; the current conditions and business conditions stats have also exceeded forecasts.

Additional Euro support has come from the EZ October construction output figure, which has climbed from 1.9% to 2.2% on the year.

Closing off the day’s biggest Eurozone news has been the annual Q3 wage growth result, which has climbed from 0.9% to 1.6%, above forecasts.

Last week, the Euro’s overall movement against the Pound saw it trade at 0.83 for the most part, though occasional spikes upwards to 0.84 were also seen.

Pound to Euro Exchange Rate Forecast: Week of GBP EUR Losses ahead on Data Forecasts

While high-impact Eurozone data is in short supply this week, the Euro is still expected to be stronger than the Pound due to poor UK data forecasts.

On the UK side, Confederation of British Industry (CBI) trades are expected to fall on Tuesday, Government borrowing is expected to rise on Wednesday and Friday’s GDP stats have a Q3 drop expected to round off a negatively-predicted data set.
In the quieter Eurozone, Wednesday afternoon is expected to bring an improvement for the Eurozone December consumer confidence flash, although Friday has a marginal decline in the German GfK consumer confidence figure for January predicted.

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