Euro to Pound (EUR/GBP) Exchange Rate Rises as Brexit Concerns Heat Up
The Euro Pound (EUR/GBP) exchange rate is up today by over 0.2% and is trading within the region of £1.1139.
The Euro (EUR) was strengthened against the Pound (GBP) after the release of the Eurozone’s retail figures for November showed a better than-expected increase at 0.6%, shooting over the expected 0.1% rise.
The Pound was further weakened against the Euro today after the release of the UK’s year-on-year new car sales figures for December, which fell at their fast rate in a decade to -5.5% against last year’s -3%.
With analysts blaming the poor figures on uncertainty surrounding Brexit, the Chief Executive at the Society of Motor Manufacturers and Traders, Mike Hawes, commented on Theresa May’s Brexit deal:
‘Everyone recognizes that Brexit is an existential threat to the UK automotive industry and we hope a practical solution will prevail.’
Today also saw the release of Germany’s retail sales figures for November which showed a better-than-expected increase to 1.4% against October’s -0.3%, bolstering confidence in Germany’s economy into the New Year.
These gains were somewhat muted, however, by today’s publication of Germany’s factory order figures for November which fell for the first time in four months, showing a worse-than-expected decrease to -1.0% against October’s 0.3%. This, however, left the EUR/GBP exchange rate relatively unmoved.
GBP/EUR Exchange Rate Weakens as May Urged to Prevent Brexit ‘No-Deal’
The Pound (GBP), meanwhile, has been plagued by heightened Brexit uncertainty, with Prime Minister Theresa May receiving 200 signatures from MPs – both Leavers and Remainers – urging her to rule out a Brexit ‘no-deal’.
Highlighting the division between the UK Government and Parliament, this has dampened investors’ confidence in the Pound.
The Pound remains in a weakened state as Brexit debates are set to heat up on Wednesday with the return of MPs to the House of Commons to discuss Theresa May’s UK-EU withdrawal agreement, as investors become increasingly skittish over any signs of a Brexit ‘no-deal’.
EUR/GBP Forecast: Pound to Claw Back Losses on Weak Eurozone Data?
Tomorrow will see the release of Germany’s industrial production figures for December, which are expected to increase, potentially bolstering the Euro further against Sterling.
However, these gains may be clipped later tomorrow after the release of the Eurozone’s business climate figures, which are expected to decrease.
Also tomorrow will see the publication of the Eurozone’s consumer confidence figures for December which are also expected to decrease, potentially further dampening confidence in EUR.
GBP, furthermore, may claw back any losses against EUR tomorrow if the UK’s Halifax house prices figures for November increase, potentially weakening the EUR/GBP exchange rate.