GBP EUR Moves Higher after Weaker EU Manufacturing Data

GBP EUR Lower Despite Weaker Euro Data 

The pound remains close to some of the highest levels we have seen against the Euro in the last months creating a good opportunity for those clients looking to buy Euros. UK politics is still going to the big driver for sterling exchange rates in these coming weeks and months with the main topic of Brexit dictating the direction of travel. The pound has been boosted considerably against the Euro now that the second round of the Brexit negotiations have been concluded which covers the transitional arrangements for after when Britain leaves the EU in March 2019.

However the issue of a customs union is still to be decided and there have been reports that the UK Prime Minister Theresa May could be considering remaining in the Customs Union. However there are members of the House of Lords that would like to see the UK remain in the EU’s Customs Union and there was a majority that voted in favour last week. The government’s response is that Britain will not be staying in the Customs Union but there is still likely to be considerable volatility for the pound as Theresa May does not command a large enough majority to safely push her vision of Brexit through. There are a number of politicians within the conservative government that will vote against Theresa May which could result in a high degree of political uncertainty if tensions rise considerably.

The Euro has is also starting to come under a bit of pressure after it was reported yesterday that manufacturing in the EU has fallen to its lowest level in 14 months. Manufacturing data released yesterday as per the Purchasing Managers Index fell to the lowest levels in 14 months. Any further deterioration in EU economic data could help see the pound push higher against the Euro with a move towards 1.18 a real possibility despite the usual Brexit concerns.

For more information on Euro exchange rates and how to maximise on these developments which create better opportunities then please get in touch with me James at [email protected]