The Euro has been in low demand today, owing to growing fears that the US Election result will inspire further division among EU nations.
- EUR GBP softens to 0.85 – GBP EUR strong at 1.16
- Euro slides on Italian referendum fears – German inflation rises in October
- Pound turns bullish on Trump trade hopes – UK construction worst in 4 years
- Eurozone industrial data due next week – Positive predictions for UK inflation
The Pound has been greatly buoyed by the latest US developments, which bode well for UK-US trade after the Brexit.
Euro Exchange Rate News: Trump-Inspired Unrest Weakens EUR GBP
The Euro Pound exchange rate has slumped to 0.86 today, although the latest Eurozone data should have been broadly supportive to the single currency.
Inflation rate results for Germany have shown a rise on the month and the year in October for both the base and harmonised fields.
In spite of this, however, the concern has been growing that a shock win by the anti-establishment Trump in the US may inspire further right-wing and secessionist movements in Europe.
The first test of this will come in early December, when Italy holds a referendum on constitutional reform. As it stands, Italian Prime Minister Matteo Renzi is expected to resign if he loses the vote, which is forecast to fuel political upsurges for radical opposition parties.
Franklin Templeton Head of European Fixed Income David Zahn offered comment, saying;
‘The Trump win does show that populism continues in 2016 and suggests a ‘no’ vote in the Italian referendum could be stronger than we assumed’.
Pound Euro Exchange Rate Triumphs as Hopes Grow of UK-US Trade Deal
The Pound Euro pairing has climbed to 1.16 today, one of the best rates seen in a while, and has additionally recorded a surprise climb to 1.26 against the US Dollar.
The latest UK news has not been especially supportive, with September’s annual construction output falling from 0.8% to 0.2%, therefore investors have had to look further afield.
Despite Theresa May receiving a phone call from President-Elect Trump after 9 prior world leaders, investors have still been optimistic about what the future of the UK-US ‘special relationship’ could hold.
This sentiment has mainly come from prior comments from Trump trade advisor Dan DiMicco, who stated that the UK would be in a priority position when it came to establishing fresh trade deals.
Future EUR GBP Forecast: Euro may Crash on Monday after EZ Industrial Production Announcement
The next major movement for the Euro is expected to come on Monday morning, when the industrial production results for the overall Eurozone in September will be announced.
Forecasts for the result have been negative overall, with an annual slowdown and monthly drop into a negative range expected.
Outside of any further US news today, the Pound is next expected to be moved against the Euro by the coming Tuesday’s inflation rate figures for October.
As of writing, a slight rise from 1% to 1.1% was forecast on the year, while a reprint at 0.2% was expected on the month.
Current Interbank Exchange Rates
The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.86 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.16 today.
