Pound (GBP) Steady Following Debate Disappointment
The Pound Euro (GBP EUR) exchange rate appears to have stabilised around half a cent lower than yesterday after Wednesday’s recovery was cut short following the news that MPs would not be able to vote on the terms of ‘Brexit’.
Sterling spiked yesterday morning following an announcement from Prime Minister Theresa May that she would allow MPs to debate on potential ‘Brexit’ strategy ahead of official negotiations early next year.
However the Pound later tumbled to its current levels after it became clear that the debate would not include an official vote and that the government would still have the ultimate say on the direction of ‘Brexit’ negotiations.
Investors will fear that this makes the possibility of a ‘hard Brexit’ more likely, especially following recent rhetoric from UK officials on how Britain would be better off outside the single market.
Euro (EUR) Struggles to Pressure Pound Past 1.10 Point
The Pound managed to resist further pressure from the Euro today, thanks to a better than expected RICS house price balance report, with prices shooting past forecasts of 14% to reach a 17% increase in the month of September.
Meanwhile the only Eurozone data for the day was the German consumer price Index which showed a lack of growth as it held at 0.1%, providing little support for the Euro.
Pound Currency Trading to Suffer Due to Anxiety over Marmite Row?
The general public have begun to feel the sting of the low value of Sterling today as Tesco has stopped stocking popular Unilever brands like Marmite in an argument over a 10% increase in wholesale prices.
This is likely to cause more pressure on the GBP EUR exchange rate as investors begin to worry about how other British businesses will be effected by rising import costs and possible tariffs should the UK lose access to the single market.
GBP EUR Forecast: Exchange Rate to Trade flatly as Traders Look Ahead
With no more notable data for the week, traders will be looking to next week for more significant data in order to gauge possible movement, as both the UK and Eurozone release their consumer price index for September.
The European Central Bank (ECB) will also be making their next rate decision on Thursday, and although no change is expected investors will be looking to see if there is any truth behind the recent rumours that the ECB is looking to taper quantitative easing.
Current Interbank Exchange Rates
At the time of writing the GBP/EUR exchange rate was trending around 1.10 and the EUR/GBP exchange rate was trending around 0.90.
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