EC’s Juncker Boosts GBP/EUR Exchange Rate by Backing Accelerated Brexit Process
The Pound (GBP) has risen against the Euro (EUR) today, hitting a level of €1.1233.
This advance comes after supportive statements from European Commission (EC) President Jean-Claude Juncker about the Brexit process.
In comments that have reassured GBP traders about progress in ongoing Brexit talks, Mr Juncker has said:
‘The United Kingdom will never be an ordinary third country for us. The United Kingdom will always be a very close neighbour and partner, in political, economic and security terms.
‘The commission’s negotiators stand ready to work day and night to reach a deal.
‘We owe it to our citizens and our businesses to ensure the United Kingdom’s withdrawal is orderly and that there is stability afterwards.’
Although Mr Juncker also added that the UK would unambiguously leave the EU single market, the Pound to Euro exchange rate has still risen on these remarks.
Euro to Pound (EUR/GBP) Exchange Rate Drops on Disappointing Industrial Output Data
Today’s Euro to Pound (EUR/GBP) exchange rate losses have been triggered by unsettling industrial production data for July.
The year-on-year reading has shown a sharp drop from 2.3% growth in 2017 to -0.1% contraction, while on the month a negative -0.8% printing has been seen.
Future Pound Sterling to Euro Forecast: Are GBP/EUR Exchange Rate Gains ahead on BoE Interest Rate Decision?
The Pound (GBP) could firm against the Euro (EUR) in the days ahead, when Bank of England (BoE) policymakers meet on Thursday.
Before the BoE meeting, however, German inflation rate figures will come out – these finalised figures are tipped to show slower monthly price growth in August.
Germany’s economy is so large that slower inflation could cause a Eurozone-wide decline; as such, the Euro could drop in value if German inflation is reported lower.
Getting back to the BoE, policymakers will be making their monthly interest rate decision on Thursday and could cause GBP/EUR exchange rate gains.
This is because although interest rates are expected to left unchanged at 0.75%, the BoE event could still bring signs that there will be higher interest rates in the future.
In the best case scenario, BoE officials, BoE Governor Mark Carney and the BoE’s meeting minutes will all point to a UK interest rate hike coming in 2019.
There is currently high uncertainty about whether the Brexit process will bring another interest rate cut or frozen rates until after the UK leaves the EU.
The best chance for a Pound Sterling rise on Thursday is if all sources suggest not only a 2019 interest rate hike, but one early in the year at that.
Returning to Eurozone events, the European Central Bank (ECB) will be holding a policy meeting on Thursday afternoon.
Like the BoE, no interest rate adjustment is forecast but ECB policymakers could still inspire a Euro to Pound rate rise if they hint at an early 2019 interest rate hike.
