EUR/GBP Exchange Rate Edges Higher despite German Economic Woes
The Euro Pound (EUR/GBP) exchange rate rose today and is currently trading around £0.8949 on the interbank market.
The Euro (EUR) edged higher against the Pound (GBP) following the printing of the German IFO current assessment figures for June, which rose above forecast to 100.8.
However, many of these gains were held back by disappointing German IFO business expectations figures, which eased in June below their forecast 94.5 to 94.2 – a five-year low.
President of the IFO, Clemens Fuest, summarised the sentiment, saying:
‘The German economy is heading for the doldrums.’
Mr Fuest also commented that the business climate in both German manufacturing and services had worsened, causing further concern for single currency traders as its largest economy continues to show signs of slowing down.
Today will see a speech by Sabine Lautenschläger, a member of the European Central Bank’s Executive Board.
Any dovish comments about the Eurozone’s economy could see the EUR/GBP exchange rate begin to ease.
GBP/EUR Exchange Rate Falls as Boris Johnson’s Media Blackout in Question
The Pound (GBP) has remained subdued today, with no notable UK economic data releases leaving traders focusing on political developments instead.
The ongoing Tory leadership race between Boris Johnson and Foreign Secretary Jeremy Hunt is heating up, with pressure coming down on Mr Johnson for avoiding media scrutiny during his leadership campaign.
Mr Hunt said:
‘If you are not clear about exactly what you [Boris Johnson] are going to do, that coalition will collapse immediately and [we] will have Corbyn in Number 10.’
Brexit remains in focus, however, with Mr Johnson likely to face a ‘Tory coup’ over his no-deal Brexit stance, which has left some Sterling traders relieved.
Meanwhile, Nigel Farage, the leader of the controversial Brexit Party, has said that he would join a Tory coalition to encourage a no-deal exit from the EU.
Mr Farage commented on the Conservative leadership race, saying:
‘Whatever happens, Boris will win, because a very large number of people have joined the Conservative party in the last six months just to have this vote. The Eurosceptics, encouraged by Arron Banks and others, have joined the Tory party, so Boris will win.’
EUR/GBP Outlook: Brexit and Tory Leadership Race to Remain in Spotlight
Euro traders will be looking ahead to tomorrow’s printing of the French business climate figures for June.
Any signs of improvement could provide some uplift for the single-currency.
Tomorrow will also see a speech by the European Central Bank’s Benoit Cœuré, a member of the bank’s Executive Board, and with any further dovish comments about the Eurozone’s economy, we could see the Euro begin to fall.
The Pound Euro (GBP/EUR) exchange rate will remain sensitive to political developments, with Brexit and the ongoing Tory leadership race to remain in focus.
