Euro Pound Exchange Rate Falls as UK PM Attends Summit
The Euro Pound (EUR/GBP) exchange rate is weakening this morning as UK Prime minister Rishi Sunak is set to attend the British-Irish Council Summit.
At the time of writing the EUR/GBP exchange rate is trading at around €0.8765 which is down roughly 0.5% from this morning’s opening rate.
Pound (GBP) Recovers amid British-Irish Council Summit Expectations
The Pound (GBP) is up against the majority of its peers this morning amid some modest Brexit optimism.
PM Rishi Sunak is set to become the first UK prime minister to attend the British-Irish Council Summit in 15 years.
Reuters reports that in his opening speech Sunak will deliver a message of togetherness:
‘We face huge challenges from global economic headwinds to war in Europe. So let’s be pragmatic. Let’s work together in our shared interests’.
It’s hoped that Sunak will speak with Taoiseach Micheál Martin about resolving the Northern Ireland Protocol. Sunak appears more pragmatic about resolving the issue than his predecessor Liz Truss which has come as a relief to GBP investors.
The Pound is firm amid hopes a positive summit could help to ease Brexit tensions between the UK and EU.
Euro (EUR) Struggling for Support Despite Ukraine Developments
The Euro (EUR) is down against the majority of its peers this morning, in spite of positive news from Ukraine.
Russian soldiers were ordered to retreat from the city of Kerson this morning amid logistical difficulties. According to Russian defence minister, Sergei Shoigu the city can not be adequately supplied and successfully function.
Despite this encouraging news, Ukraine is sceptical about the Russian forces’ intensions. An address from Ukraine’s President Volodymyr Zelenskiy promoted cautious this morning, noting there was still work to do to reclaim the whole country:
‘Therefore, we move very carefully, without emotions, without unnecessary risk. In the interests of the liberation of our entire land and so that the losses are as small as possible’.
Mimicking Zelenskiy, Euro investors also remain wary amid concerns about the future of the war, which is limiting the single currency’s potential today.
Euro Pound Exchange Rate Forecast: Plunge in UK GDP to Weigh on Sterling?
Looking ahead, the Euro Pound exchange rate will likely be driven by the publication of the UK’s latest GDP figures tomorrow.
Economists forecast the UK’s economy will have shrunk by 0.5% in the third quarter. This is likely to lend weigh to the Bank of England’s (BoE) claims that the UK is in a recession and could see Sterling close the week on a sour note.
Germany will also publish its latest inflation data early tomorrow morning.
October’s final reading for headline inflation is expected to confirm an increase from 10% to 10.4%. However, if the finalised figures deviate in anyway then it could inject some volatility into the Euro.
In the meantime, the Euro will likely remain sensitive to geopolitical developments. Investors will be paying close attention to developments within Ukraine.
