EUR/GBP Exchange Rate Steady ahead of May-Juncker Brexit Talks
The Euro Pound (EUR/GBP) exchange rate held in a narrow range on Wednesday morning as markets braced ahead of Theresa May latest trip to Brussels later this evening.
At the time of writing, the EUR/GBP exchange rate is drifting lower this morning, pulling the pairing back below €1.15 as the pairing retreats from a two-week high.
Pound Sterling (GBP) Exchange Rates Subdued as May Heads to Brussels
The Pound (GBP) stalled against the Euro (EUR) and the majority of its other peers this morning as Theresa May prepares to meet with European Commission President, Jean-Claude Juncker later this evening for the latest round of Brexit negotiations.
The PM is expected to present the EU with new legal proposals regarding the Irish backstop this evening, in an effort to reach an ‘alternative’ that will convince MPs to back the withdrawal deal in a vote later this month.
Speculation that the EU may be willing to offer concessions to get the deal through the door saw the Pound rocket higher on Tuesday, so expect to see Sterling stumble again this evening if Juncker remains unwilling to budge.
In the meantime the UK’s latest industrial orders figures help firm up the Pound defences this morning with the Confederation of British Industry’s (CBI) reporting that its orders index unexpectedly jumped from -1 to 6 in February.
Euro (EUR) Exchange Rates Supported by German PPI figures
Meanwhile the Euro (EUR) was buoyed this morning by the release of Germany’s latest Producer Price Index.
Germany’s Federal Statistics Agency reported a surprise rise in PPI last month with producer prices, climbing from -0.4% to 0.4%, beating forecasts for a 0.2% contraction.
This propelled the index back to an all-time high of 105.1 and suggests that German economic activity may have been a little stronger than expected at the start of 2019, much to the relief of EUR investors.
However the Euro could still face some headwinds later in today’s session with the release of the Eurozone’s latest consumer confidence figures, with the appeal of the single currency potentially weakening if sentiment remained mostly negative in February as expected.
EUR/GBP Exchange Rate Forecast: Weak Eurozone PMIs to Drag on the Euro?
Looking past this evening Brexit talks to the second half of the week, movement in the Euro Pound (EUR/GBP) exchange rate is likely to be driven by the release of the Eurozone’s latest PMI figures.
Thursday’s figures are expected to report that growth in the Eurozone’s private sector continued to stagnate in February, with the bloc’s manufacturing sector expected to have slipped dangerously close to the point of contraction.
This will do little to dispel fears that the Eurozone is in the midst of an economic slowdown and could lead to some notable weakness in the Euro through the latter half of this week.
Meanwhile outside of potential Brexit developments the focus for GBP investors may turn to the CBI’s distributive trends report, with Sterling likely to give ground in UK retail activity contracted in February as some analysts predict.
