- GBP EUR rate falls to 1.17 – GBP USD drops to 1.26
- Pound demand slides as Article 50 vote approaches – UK production stats prove highly disappointing
- Euro soft ahead of ECB decision – US Dollar appeal eroded by Trump volatility
The Pound has fallen considerably against the Euro and US Dollar today, ahead of a surprise vote on Article 50. The day’s UK data has partly facilitated this crash in Sterling demand, as both the industrial and manufacturing production figures for October have fallen into negative ranges.
The biggest draw on investment in Sterling, however, has been a recently approved vote this evening by MPs on Article 50. While the specifics have been difficult to pin down, the broad idea is that MPs will be voting on whether they will approve triggering Article 50 in 2017, despite not knowing the Government’s objectives and with a major Supreme Court hearing on the matter still ongoing.
SNP and Liberal Democrat MPs have already voiced their opposition to the vote, so it remains to be seen what will occur if a majority reject the vote.
The Euro has been performing weakly today, on account of fears about ECB monetary easing on Thursday afternoon.
US Dollar demand has also dropped off so far, after President-Elect Donald Trump triggered a significant drop in Boeing shares by criticising Air Force One construction costs. This event is being considered more widely, as it could be the tip of a Trump-induced iceberg given how influential his social media posts are.
(Last updated December 7th, 2016)
The Euro has largely trimmed its gains since Monday’s surprise rally, while the US Dollar has fallen back on fears of a rift between the Fed and President-Elect Trump.
Pound Exchange Rate News: Sterling Demand Remains High as A50 Appeal Hits Day Two
The Pound has managed to open trading with small but significant gains against the Euro and US Dollar.
The latest UK news continues to focus on the Supreme Court’s hearing of the Article 50 appeal, which is now in the second of four days.
While Monday’s developments were extremely dry, they did at least show how the process is likely to play out over the next three days.
Reflecting on day one was the Financial Times’ David Allen Green, who stated;
‘Is the Government in trouble? It is far too early to say. The judges are testing arguments in their questions, not reaching conclusions. But the Government cannot be certain of victory, and watching the Government’s QC James Eadie in intellectual combat with 11 supreme court judges makes one realise how much rides on one four-day hearing’.
Euro Demand Levels Off after Mass Demand, US Dollar Weakens after Fed Official’s Warning
The Euro has largely calmed against its peers during trading so far, having undergone extraordinary shifts in appeal over the past day.
The EUR initially dropped when it was known that Italians had voted ‘No’ in the constitutional referendum, but EUR GBP and EUR USD quickly bounced back to print at higher levels than before the result was announced.
Owing to mass profit-taking, the Euro has since weakened, with a forecast-beating annual Q3 GDP growth rate result failing to inspire support for EUR.
For the US Dollar, today has been mixed so far, with USD fluctuations being recorded across the board.
The latest US news has come from Fed official James Bullard, who has warned that President-Elect Trump should not take an aggressive stance on fiscal stimulus, owing to the increased risk of recession that this entails. Fellow Fed official Charles Evans also agreed, commenting that ‘You don’t need explicit stimulus’ at the present time.
Future GBP EUR USD Forecast: UK Production and US Trade Balance to Trigger Volatility
The next scheduled data to watch out for will come from the US, covering the nation’s October trade balance results.
As it stands, the US Dollar could soften on the result, which is expected to show a deficit expansion from -36.44bn to -39bn.
Following this from the Eurozone will be a speech from European Central Bank (ECB) official Benoit Coeure, which is due in the mid-afternoon.
Asides from any Supreme Court developments, the Pound is next set to be shifted by Wednesday morning’s October industrial and manufacturing production results, which are expected to rise on the year in both fields but dip on the month for the manufacturing variant.
Current Interbank Exchange Rates
The Pound Euro (GBP EUR) exchange rate was trending in the region of 1.18 and the Euro Pound (EUR GBP) exchange rate was trending in the region of 0.84 today.
The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.27 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.78 today.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.07 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.92 today.
