Published On: Fri, Aug 10th, 2018

Pound to euro exchange rate: Sterling recovers after hitting record year-low against euro | Travel News | Travel

The pound has risen after plummeting to its lowest levels against both the euro and the dollar due to fear of a no-deal Brexit.

New UK figures today could see sterling “extend gains” even more, experts have said.

The pound is currently trading at €1.115 against the euro, at 8.30am, according to Bloomberg.

Laura Parsons, currency analyst at TorFX, spoke to regarding the latest exchange rate figures.

“After hitting its worst levels against the euro and US dollar for almost a year earlier in the week, the pound was able to stage a modest recovery on Thursday. 

“Reports of potential new offer from EU negotiators lent Sterling a little support and helped the GBP/EUR exchange rate climb back above €1.110. 

“The pound could extend gains in the hours ahead if the UK’s latest growth and industrial production figures impress.”

The last major Eurozone data of the week will be this morning’s French industrial production reading, which is tipped to show growth in June.

Monthly industrial output levels are forecast to rise from -0.2 per cent to 0.5 per cent, which might cause early EUR/GBP exchange rate gains.

Getting back to the pound, after a week of losses on Brexit speculation, Sterling could finally recover against the euro on today when UK GDP data comes out.

GDP growth readings for Q2 2018 are tipped to show a faster pace of economic expansion on the quarter and the year; both results could boost the GBP/EUR exchange rate.

The pound could also advance against the euro if Q2 quarterly business investment figures rise; current expectations are for a shift from -0.4 per cent in Q1 to 0.3 per cent in Q2.

Yesterday the pound was trading at a level of €1.109; as with earlier in the week, these losses are down to Brexit-linked market concerns.

For the GBP/EUR exchange rate, this is near the lowest level of trading since mid-September 2017.

A lack of direct UK economic news has led GBP traders to focus on the dangers of a possible no-deal Brexit, which is seen as an increasingly likely outcome.

Fears that the UK could crash out of the EU without any kind of solid arrangement have drained GBP trader confidence and contributed to today’s lacklustre GBP/EUR trading.

In a sign that the UK government considers a no-deal Brexit to be a distinct possibility, Prime Minister Theresa May is reportedly planning to hold a cabinet meeting in September to discuss the issue.

A recent letter from Mrs May to Conservative Party members has highlighted the current lack of progress in Brexit talks: “Our negotiations on our future relationship have reached an impasse. [The EU’s proposed options are] not acceptable to me, or to the United Kingdom.”

While the pound has been dragged down by fears that a no-deal Brexit is likely, not all economists see this as an inevitable outcome.

Among those taking a more measured approach, ING economists have forecast: “While the outlook for Brexit over the next few months is incredibly uncertain, we still suspect the most likely outcome is that a mixture of fudge and ‘de-dramatised’ language sees the withdrawal agreement passed by a majority of UK MPs, allowing the [Brexit] transition period to commence.”

Source link

About the Author


Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Pound to euro exchange rate: Sterling recovers after hitting record year-low against euro | Travel News | Travel