GBP/EUR Exchange Rate Rangebound as Many Eurozone Markets Closed for Ascension Day
The Pound Euro (GBP/EUR) exchange rate held steady today and is currently trading around €1.1340 on the interbank market.
The Euro (EUR) steadied against the Pound (GBP) following the publication of the flash Spanish CPI figures for May, which rose above the forecast 0.0% to 0.2%.
Meanwhile many other countries throughout the Eurozone, including France and Germany, are closed for the bank holiday, Ascension Day, leaving markets relatively steady and reliant on political and global economic developments.
US-China trade tensions have had some traders flee to the Euro’s safe-haven status, with China hitting out at the US calling its recent actions as the result of ‘naked economic terrorism’.
Zhang Hanhui, the Chinese Vice Foreign Minister warned the US, saying:
‘We oppose a trade war but are not afraid of a trade war. This kind of deliberately provoking trade disputes is … economic homicide, economic bullying.’
GBP/EUR Exchange Rate Flat as UK Car Production Slashed by Nearly Half
The Pound has remained flat against its major competitors this morning, despite yesterday’s news that UK car production had been slashed by nearly half due to Brexit uncertainty, according to the Society of Motor Manufacturers and Traders.
Mike Hawes, the Chief Executive at SMMT, commented:
‘This is why no deal must be taken off the table immediately and permanently, so industry can get back to the business of delivering for the economy and keeping the UK at the forefront of the global technology race.’
The Deputy Governor of the Bank of the Bank of England (BoE), David Ramsden, was generally gloomy about the economy, disagreeing with the Monetary Policy Committee’s (MPC) earlier forecasts.
He said:
‘Relative to the best collective judgement expressed in the MPC’s central forecast I am … a little more pessimistic on GDP growth than my colleagues on the MPC.’
Sterling, however, has failed to make any notable gains due to the uncertainty surrounding Brexit and the future leadership of the Conservative Party, causing many investors to remain cautious as events unfold.
GBP/EUR Forecast: Talk of Second Referendum Could Ease Hard Brexit Fears
Pound traders will be looking ahead to tomorrow’s publication of the UK GfK consumer confidence figures for May, any signs of improvement would prove positive for GBP.
These will be followed by the UK consumer credit figures for April, which are expected to increase.
Euro investors, meanwhile, will be looking ahead to the German retail sales figures for April, which are expected to improve against March’s -0.2%.
The flash German harmonised index of consumer prices for May are expected to increase at 0.3%, potentially buoying the EUR/GBP exchange rate.
Tomorrow will also see Italy’s GDP figures for the first quarter, which are expected to hold steady at 0.2%.
The GBP/EUR exchange rate will remain dictated by political developments, and with any further signs of MPs entertaining the possibility of a second referendum, this could provide an uptick for Sterling the receding fears of a no-deal Brexit.
