Euro Pound Exchange Rate Lacks Drive to Keep Climbing
The Euro (EUR) has been one of this week’s more appealing major currencies, and the Euro to Pound Sterling (EUR/GBP) exchange rate is trending higher. Investors are hesitant to sell the Pound (GBP) too much though, as Brexit deal hopes persist.
Since opening this week at the level of 0.8986, EUR/GBP has been trending with a largely upside bias. Yesterday, EUR/GBP touched on a high of 0.9080 which was the best level for the pair since late October.
At the time of writing on Thursday afternoon, EUR/GBP trends closer to the level of 0.9021. The pair is still trending higher as uncertainty over the fate of the Brexit process is keeping the Pound under pressure.
Euro (EUR) Exchange Rates Continue to Benefit from Risk Sentiment and Eurozone Data
The Euro remains one of the market’s most appealing major currencies. Investors continue to buy the Euro on a combination of factors, including weakness in rival currencies like the Pound and US Dollar (USD).
The safe haven US Dollar has been sliding as investors are more willing to take risks. The Euro is climbing as the US Dollar falls.
On top of this boosting the Euro though, the shared currency is appealing as the latest Eurozone data continues to indicate resilience to the coronavirus pandemic.
The Eurozone’s latest services PMIs and retail sales results beat forecasts.
Eurozone retail sales rose 1.5% month-on-month, and at 4.3% year-on-year. According to the retail sales report, published by Eurostat:
‘In the Eurozone in October 2020, compared with September 2020, the volume of retail trade increased by 2.0% for both non-food products and for food, drinks and tobacco, while automotive fuels fell by 3.7%,’
Pound (GBP) Exchange Rates Mixed as Brexit Speculation Intensifies
Uncertainty over the direction of Brexit negotiations is reportedly intensifying, with less than a month until the end of the 2020 Brexit transition period.
Some reports have suggested that a Brexit deal may be mere days away, but others suggest that the UK and EU still have significant gaps on some major negotiation topics. This includes issues such as fisheries and foreign aid.
According to one EU diplomat, via Reuters:
‘We are not hours away from a deal, what we still need to agree is quite substantial,
We’ve reached a point where we are so close to the limits of our mandate that we need a movement on the side of the UK if we want to strike a deal.’
Euro Pound (EUR GBP) Exchange Rate Could Plummet if Brexit Deal is Reached
With all of this week’s UK data now published and Brexit still remaining the primary cause of Pound movement, the Euro to Pound exchange rate is likely to remain focused on Brexit developments in the coming sessions as well.
It’s likely that Brexit will only see continued intense focus from markets until the outcome of negotiations is known, with less than a month until the end of the Brexit transition period.
If a deal really is mere days away and is announced soon, the Euro to Pound exchange rate could plunge as the Pound rises in relief.
On the other hand though, no-deal Brexit fears intensifying would have the opposite effect. The Pound would plunge and EUR/GBP would surge higher.
The Euro will likely continue to be influenced by movement in rival currencies.
Tomorrow’s German factory orders report could also influence the Euro to Pound exchange rate if it surprises investors.
