The GBP EUR exchange rate stabilised after tumbling yesterday as markets expect the European Central Bank (ECB) to announce an extension to its quantitative easing programme later today.
Pound Euro (GBP EUR) Flat as Markets Predict Further ECB Stimulus
The Pound Euro (GBP EUR) exchange rate has trended flatly today as investors predict that ECB President Mario Draghi will announce an extension to its QE programme this afternoon when the Bank meets for its latest policy meeting.
Analysts forecast that the ECB will seek to extend its economic stimulus package by around six-months after it was initially planned to end in March 2017. The relatively conservative estimate for further monetary easing is helping to prevent any major drops in the single currency.
However there are concerns that the Italian banking crisis could force Draghi to take a more dovish approach, leading to more stimulus than expected despite the recent growth in the Eurozone.
Sterling Pressured as ‘Brexit’ Timetable backed by MPs
The Pound remained pressured by yesterday news that MPs had agreed to back the government’s plans to trigger Article 50 of the Lisbon Treaty and begin the ‘Brexit’ process by the end of March 2017.
The backing was part of an amendment to a Labour motion that called for Prime Minister Theresa May to outline the government’s ‘Brexit’ plans to allow parliament to ‘properly scrutinise’ the government’s proposals for leaving the EU.
Markets still fear the repercussions that leaving the EU will have on the UK economy as comments from both sides of the table have indicated that the UK may lose access to the single market once negotiations begin next year.
Meanwhile the Supreme Court hearing on whether the government will be invoke Article 50 without the consent of parliament is due to finish today, with investors worrying that a ruling in favour of the government will make a ‘hard Brexit’’ more likely.
GBP EUR Exchange Rate Forecast: UK Trade Data May Bolster Pound Tomorrow
The GBP EUR exchange rate may be lifted by UK data tomorrow as economists predict that the UK Trade Balance will rise from -£5.2bn to -£3.4bn in October.
Meanwhile Germany’s own trade balance is forecast to drop from €24.4bn to €22.0bn over the same period likely weighing on the Euro as it stokes fears of a slowdown in the Eurozone’s largest economy following a string of disappointing data in recent weeks.
Current Interbank Exchange Rates
At the time of writing the GBP/EUR exchange rate was trending around 1.17 and the EUR/GBP exchange rate was trending around 0.85.
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