November 28, 2019 - Written by John Cameron
STORY LINK Pound Euro (GBP/EUR) Exchanger Rate Flat as YouGov Predicts Comfortable Tory Majority
Pound Sterling Euro (GBP/EUR) Exchange Rate Touches Near Seven-Month High
The Pound Sterling Euro (GBP/EUR) exchange rate remained muted on Thursday, leaving the pairing trading at around €1.1729.
Last night, YouGov released its seat-by-seat predictions for the UK general election which offered Sterling some support.
This allowed the Pound to briefly touch near seven-month highs against both the Euro and US Dollar (USD) as a Tory victory would end more than three years of Brexit uncertainty.
The results of the poll revealed the Conservatives were predicted to gain a comfortable majority of 68, which is Pound-positive.
While the result shows a big win for Boris Johnson, the same cannot be said for Jeremy Corbyn. In a grim reading, the Labour Party is expected to fall back to 211 seats from the current 262.
YouGov accurately predicted the outcome of the 2017 election, and following the release of its latest poll stated:
‘Most seats changing hands are the ones that Labour won in 2017 that are now set to be taken by the Conservatives. What happens in these constituencies is the most important dynamic in deciding whether Boris Johnson has a majority, and how large it ends up being.’
Euro (EUR) Muted as Eurozone Sentiment Rebounds
The single currency was left flat against the Pound on Thursday despite data showing that Eurozone sentiment rebounded in November.
The European Commission showed that thanks to an increase in optimism in the services sector, economic sentiment rose to 101.3 from October’s 100.8.
Services sector sentiment, which is responsible for around two-thirds of the bloc’s GDP rose from 9 in October to 9.3 in November.
However, the Euro was left under pressure as today’s data was a mixed bag as the bloc’s business climate indicator slumped from -0.2 to -0.23 in October.
Commenting on this morning’s data, ING’s Peter Vanden Houte wrote:
‘The latest batch of data gives the feeling that the economy is still in some kind of purgatory, with the jury still out as to whether the next phase will be heaven or hell. The good news is that the Eurozone economy doesn’t seem to be weakening any further. But that doesn’t mean that a strong upturn is in the offing, certainly not in the short-term.’
Pound Euro Outlook: Will Consumer Confidence Buoy GBP?
Looking to this afternoon, the Euro (EUR) could slump against the Pound (GBP) following the release of Germany’s flash inflation data.
If inflation slumps further than expected in November, the single currency is likely to be left under pressure.
Meanwhile, Sterling could receive an upswing of support overnight following the release of the UK’s GfK consumer confidence data.
If confidence edges up despite an increase in Brexit pessimism and election uncertainty, the Pound Euro (GBP/EUR) exchange rate is likely to rise.
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TAGS: Pound Euro Forecasts