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Pound to the Euro Rate Today - ?/? Slides despite Doused German Business Confidence

February 22, 2019 - Written by Toni Johnson

- The Pound to the Euro exchange rate @ €1.15153 today.

- The Euro to Pound Sterling exchange rate @ £0.86841 today.

- Sterling holds weekly gains on Brexit deal hopes.

At the end of the week, the British Pound to Euro (GBP/EUR) exchange rate slipped back from its weekly highs despite some underwhelming Eurozone data.

GBP/EUR was on track to have sustained most of this week’s gains regardless though, on hopeful speculation that the UK could attempt to push its Brexit plan through Parliament as soon as next week.

After opening this week at the level of 1.1414, GBP/EUR saw a jump in demand on Tuesday and has been trending above the week’s opening levels since. GBP/EUR touched on a February high of 1.1536 yesterday, but has since slipped to trend closer to the level of 1.1480 at the time of writing.

Still, GBP/EUR is on track to have gained around half a cent this week.

While the latest Eurozone data has given investors little reason to buy the Euro, the shared currency is benefitting from weakness in its rivals.

The primary reason for the Pound’s gains have been due to Brexit speculation, though some solid UK data in recent sessions has helped the Pound to hold most of its gains.

GBP Exchange Rates Slip on UK Political Jitters despite Brexit Speculation

Investors bought the Pound on Brexit speculation this week, but with time running out on the Brexit clock and the process still causing havoc in the UK political scene the Pound has been unable to hold its best levels.

There are now less than 40 days until Brexit. This time next week, there will be less than a month until the UK is set to formally leave the EU

Despite how close the event is, there is still no clarity over how exactly Brexit will unfold.

As a result, investors are hopeful that the UK and EU will reach some kind of breakthrough that could make the Brexit deal more appealing in UK Parliament, and allow a soft Brexit to pass.

UK officials indicated in recent sessions that talks were going well and that a vote on a new deal could even take place as soon as next week.

However, the Pound’s appeal has been limited by persistent No-deal Brexit fears, and political jitters doused demand for Sterling today.

News that more members of Britain’s ruling Conservative Party, including a couple of senior MPs, would be willing to resign from the party if it heads towards a No-deal Brexit also worsened concerns about fracturing UK politics.

This week, MPs from both the Labour Party and Conservative Party have resigned, with some joining a new independent group. Uncertainty about UK politics, especially amid broad Brexit uncertainty, is leaving the Pound unappealing.

EUR Exchange Rates Supported despite Mixed Eurozone Data

Demand for the Euro was a little stronger today, despite the day’s Eurozone data failing to give investors much reason to have fresh confidence in the Eurozone’s slowing economic outlook.

The Euro has been unappealing for most of the week, as data continues to indicate that Germany’s economy is slowing more than expected.

Essentially, in terms of domestic data there is little support for the Euro or reason to buy it.

That is part of why Friday’s data, which saw some slightly better than expected inflation data, supported the shared currency.

The Eurozone’s final January inflation rate stats met expectations year-on-year, but the inflation figure came in at -1.0% rather than the expected 1-1%. It slightly doused deflation concerns but was overall not exactly an optimistic report either.

Germany’s final Q4 growth results met expectations, and February business confidence data from Ifo was disappointing. Overall the data wasn’t enough to help push GBP/EUR lower again.

GBP/EUR Exchange Rate Forecast: Brexit Developments and Eurozone Data Remain in Focus

Next week could be a key one for Brexit negotiations, and investors are hoping it will be as the month of the formal Brexit date itself draws near.

March will begin at the end of next week, and the formal Brexit date is still set for the 29th of March.

As a result, if there are no notable Brexit developments any time soon the Pound could see further and further pressure, as investors become more concerned about the possibility of a No-deal Brexit.

On the other hand, if there is a fresh Parliament vote on Brexit and the deal sees stronger popularity, the Pound could see a surge in demand.

Euro investors, on the other hand, are likely to react to upcoming Eurozone ecostats, particularly German data.

Germany’s March GfK consumer confidence survey will be published on Tuesday, with German inflation data and job market data due towards the end of the week.

Markit’s final February PMIs will come in next week too and could influence the Pound to Euro exchange rate.
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