Suggestion of ‘Imminent’ Irish Border Solution Fails to Shift GBP/EUR Exchange Rate
The Pound has traded in a narrow range against the Euro today, despite signs that an Irish border breakthrough could be imminent.
The issue of the border between Ireland and Northern Ireland after Brexit still needs to be resolved, having been missed out of the recent transitional deal.
Lee Hardman of Bank of Tokyo-Mitsubishi has elaborated on the situation, saying;
‘The Pound has derived some additional support from a report that Irish officials have been told to expect new plans “imminently” on how Britain plans to avoid a hard border with Northern Ireland.
While short on details, the report has further boosted confidence that the UK and EU can find a workable and timely solution to the Irish border issue to support plans for a “smooth & orderly Brexit”’.
Euro to Pound Exchange Rate (EUR/GBP) Static after despite Surprise Rise in German Confidence Data
The Euro has held around daily opening levels against the Pound today, with current market uncertainties preventing a Euro advance despite positive economic news.
The latest source of support has been market research company GfK, which has estimated that German consumer confidence levels will rise in April.
The company’s estimate for April showed a rise from 10.8 points to 10.9, beating forecasts for a drop to 10.7 points on the measure.
Commenting on the results, GFK analysts said;
‘This forecast presumes that Germans will be mostly spared from any escalation of possible risks’.
While not explicitly defined, these ‘possible risks’ mainly revolve around the US triggering a deterioration of global conditions via a trading conflict with China.
Pound to Euro Exchange Rate Forecast to Drop if UK GDP Stats Show Slowdown
There is a risk of moderate Pound to Euro exchange rate losses on 29th March, when UK GDP growth rate figures for Q4 2017 will be released.
Out over the morning, the stats are predicted to show a slowdown in both quarter-on-quarter and year-on-year GDP readings.
Such results could lower confidence in the UK economy and by extension the Pound, triggering a GBP/EUR exchange rate slide.
Thursday’s other UK data releases may fail to provide relief to GBP; annual business investment levels are predicted to rise, but no month-on-month change is forecast.
On the other side of the currency pairing, the Euro could make a more defined rise against the Pound on Thursday if additional supportive German data is released.
The day’s major announcements will concern the unemployment rate and inflation rate estimates in March.
Positive results are forecast in both cases; unemployment levels are tipped to drop from 5.4% to 5.3% and preliminary inflation figures are also expected to rise.
Higher German inflation could cause overall Eurozone rates to rise; this would increase the chances of a near-term European Central Bank (ECB) interest rate hike.