In today’s Pound to Euro forecast we look at GBP/EUR rates which have remained flat throughout Thursday’s trading, with little movement of note on the pair.
The Pound has been unable to sustain its move back above 1.12 against the Euro, despite a strong run of economic data this week.
UK economic data positive
Today’s lack of movement is somewhat surprising, considering UK Retail Sales came out well above the markets predicted result at 0.7%. This positive release is the culmination of a strong run of data for the UK economy this week. Yesterday’s Inflation figures were encouraging, whilst the UK Unemployment rate has now fallen to its lowest level in over 40 years at 4%.
Despite this positive run, the Pound seems shackled to its current levels and it is clear that Brexit concerns are still weighing heavily on investors’ risk appetite for the Pound.
Brexit impacting the Pound’s value
Looking ahead we have the latest round of Brexit talks between the EU and the UK resuming today. We may well have further information sooner rather than later regarding the chance of a potential no-deal Brexit.
Michel Barnier, the EU’s chief negotiator could be making an address tomorrow (Friday 17th August). Whether he does or not could well depend on any progress that is made in Brexit discussions behind the scenes.
I am still of the opinion that a deal between the EU and the UK can and will be reached, as I do not believe a no-deal Brexit scenario benefits either side. It is clear that the EU hold a stronger negotiating position but any progress with talks could help alleviate some pressure on Sterling and then the Pound may be in a position to finally make some in-roads against its Euro counterpart.
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