The Pound has slipped against the Euro on Thursday’s trading session, hitting an exchange rate of 1.1201. This dip follows voiced concerns about the future of the Conservative leadership.
While a number of Conservative MPs have been rallying round Theresa May after her troubled speech, there have also been voices of opposition to May’s continued presence as PM.
Among these dissenters has been Ed Vaizey MP, who has stated that the PM failed to restore confidence in the Conservatives after her speech.
(First Published October 4th, 2017)
The Pound has proven resilient today, managing to maintain a positive status against the Euro following forecast-beating PMI stats.
- GBP EUR rate tight at 1.1279 – EUR GBP trades at 0.8862
- Pound prints higher on services surprise – Momentum lost after May speech
- Euro weakened by retail sales slide – Higher PMI scores provide background support
- Pound may shift on imminent BoE speech – Will Euro rally on Draghi remarks?
On Tuesday’s trading session, the Pound opened at an exchange rate of 1.1311 but closed down against the Euro at 1.1275.
Pound Holds Fast on Higher UK Services PMI
The small Pound to Euro advance seen today is largely because of residual optimism from earlier PMI data.
Against expectations, the services PMI for September has risen instead of falling, although the overall composite PMI did still tick down on the month.
While this news did spark trader optimism, economists were more mixed. Some thought that it would cause the Bank of England (BoE) to consider a near-term interest rate hike, but others suspected that a UK economic slowdown was incoming.
The afternoon has been dominated by Theresa May’s closing speech at the Conservative Party Conference in Manchester, which may become memorable for the wrong reasons.
The general consensus was that May’s speech had done more harm than good to her and the Conservatives. Giving a particularly damning assessment, Guardian Opinion Associate Editor Hugh Muir said;
‘May’s problem now is not so much with her script. She began her ill-fated tenure with a pretty brilliant script on the steps of Downing Street. Today, reprising those one-nation Tory themes again, she said it “still holds”. Brexit aside, it’s probably the right Tory script for the times.
The problem is that no one alongside her or among the viewing public now sees her as befitting leading role status. She barely leads her party. That is the context against which too many will measure her speech’.
Taking the ‘glass half full’ approach, former Spectator Editor Matthew d’Ancona observed that;
‘Never has [May] delivered such a personal speech. For the Tories’ election fiasco, she took the rap unambiguously and declared herself “sorry”.
In her moment of greatest frailty, May revealed a humanity and robustness that did her credit. She proved herself, in the truest sense, strong and stable. A shame for her that it is all far too late’.
Euro Devalued by Lower Sales Stats
While earlier Eurozone data was supportive, the single currency failed to stay positive after retail sales disappointment.
The initial composite and services PMI data showed a rise in September, raising hopes about a strong Q3 for the Eurozone.
Later retail sales figures for August were less helpful, showing an unexpected slowdown on the year and a monthly worsening.
BoE in Focus for Next GBP EUR Movement
For near-term Pound movement, it is worth watching an imminent speech from Bank of England (BoE) official Sam Woods.
The BoE Deputy Governor will be giving a speech at Mansion House in London; Pound movement could be caused by any mention of interest rates or monetary policy.
The Euro may be the star of the show before then, with European Central Bank (ECB) President Mario Draghi set to give a speech very shortly.
Current Interbank Exchange Rates
At the time of writing, the Pound to Euro (GBP EUR) exchange rate was trading at 1.1279 and the Euro to Pound (EUR GBP) exchange rate was trading at 0.8861.