The recent fluctuations in the Euro Pound (EUR GBP) exchange rate continued this morning as markets remain wary over Brexit.
Pound (GBP) Fluctuates on Brexit Tensions
The Pound remains unsteady today as investors remain wary over the possibility of a breakthrough in Brexit talks.
Negotiations stalled at the start of the week after the DUP torpedoed a deal over the Irish border, the last piece of the puzzle in the completion of the UK’s exit agreement.
Reports suggest that Theresa May will offer a reworded agreement to both the DUP and the Irish Government today with hopes of placating both sides.
While the UK government is ‘absolutely optimistic’ that a deal will be struck over the Irish border, many investors remain a bit more wary.
Adding to these concerns was the imposing of a 48 hour deadline on talks by the EU’s chief Brexit negotiator, Michel Barnier yesterday evening, stating that the failure to present a finalised Brexit deal by the end of week would result in trade discussions being delayed until the New Year.
Euro (EUR) Undermined by German Industrial Figures
At the same time the Euro was shaken this this morning on the back of Germany’s latest industrial production figures, with markets disappointed to hear that factory output fell for the second month running.
According to data released this morning production contracted from -0.9% to -1.4% in October, missing expectations of a rebound to 1% growth and reaching close to a one-year low.
This was in stark contrast to the recent rise in factory orders which would normally lead to a rise in production, with the Economy Ministry attributing this divergence to a number of public holidays which saw many workers enjoy long weekends.
EUR GBP Forecast: UK to Finalise Exit Agreement?
Looking ahead movement in the EUR GBP exchange rate will undoubtedly be tied to Brexit talks for the remainder of the week, with any further uptick in the Pound being dependent on the UK finalising an exit agreement with the EU.
Meanwhile the Euro may be lifted on Friday by the release of Germany’s latest trade balance as economists forecast that the nation’s trade surplus will have expanded again in October.
Current Interbank Exchange Rates
At the time of writing the EUR GBP exchange rate was trending around 0.8807 and the GBP EUR exchange rate was trending around 1.1360.
Comments are closed.