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Pound Euro (GBP/EUR) Exchange Rate Flat as Election Debate Not ‘Game Changing’

November 20, 2019 - Written by John Cameron

Pound Sterling Euro (GBP/EUR) Exchange Rate Muted After ‘Dead Heat’ Debate

The Pound Sterling Euro (GBP/EUR) exchange rate was left flat on Wednesday, with the pairing trading at around €1.1673.

Sterling was left flat following Tuesday’s inconclusive ITV debate between Prime Minister Boris Johnson and Labour leader, Jeremy Corbyn.

While the Prime Minister continued to lead in the polls, last night’s snap poll from YouGov showed the debate was a ‘dead heat’.

51% of respondents felt Johnson won, whereas 49% felt Jeremy Corbyn performed best in the debate.

But, many believe this looks best for Labour, and commenting on this, YouGov Political Research Manager, Chris Curtis said:

‘On balance this is probably better for the Labour leader, why? Because a dead heat when you are significantly behind in the polls is probably better news for you that the person who is leading.

‘It doesn’t seem from these initial numbers to be a game changing moment.’

Sterling remained flat as the debate was not the game changer that was previously hoped for.

ECB: Risks to Global Financial Stability Have Increased

On Wednesday, the European Central Bank (ECB) warned that risks to global financial stability have increased which left the single currency flat.

In a press release, the ECB stated:

‘Downside risks to global and Euro area economic growth have increased and continue to create financial stability challenges.’

Meanwhile, the ECB’s Vice President, Luis de Guindos said:

‘While the low interest rate environment supports the overall economy, we also note an increase in risk-taking which could, in the medium term, create financial stability challenges.’

ECB Lane: Eurozone Won’t Fall into Recession

The single currency was left flat as European Central Bank (ECB) chief economist, Philip Lane said that the Eurozone will not fall into a recession on Tuesday.

In the interview, Lane noted that while Eurozone economic growth is lower than expected, there will be a recovery which offered EUR some support.

Speaking to Italian daily la Repubblica, the central banker stated:

‘The economy is growing less quickly than what we hoped. The dynamic is disappointing but not negative. We expect a recovery in the next year or two.’

He also addressed the bloc’s weak inflation rate and said that the current level of 1% was ‘unsatisfactory’.

Pound Euro Outlook: Consumer Confidence to Buoy EUR

Looking ahead, the Euro (EUR) could edge higher against the Pound (GBP) following the release of the bloc’s flash consumer confidence data.

If November’s confidence rises higher than expected it could buoy the single currency.

Investors are likely to focus on the outcome of the 12th December election which will be the main catalyst for movement of Sterling.

If reports suggest the Conservative party continues to remain ahead in the polls, and gain further support it is likely the Pound Euro (GBP/EUR) exchange rate will be left flat.

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