Investors in the Euro paid attention yesterday as the UK PM Boris Johnson met with the European Commission President Ursula von der Leyen to discuss Brexit. But it appears that despite Von der Leyen’s enthusiasm about reaching a partial deal by the end of 2020, the market did little to react in favour of the Euro, leaving the EUR/GBP exchange rate trading lower as of this morning. Meanwhile, the Euro has gained on the USD after reports suggest that a recovery in the German economy may be underway, boosting optimism for an economic recovery for the Eurozone.
EUR/GBP Exchange Rate in Favour of GBP Despite Enthusiasm From Both Parties in Brexit Negotiations
Yesterday saw the meeting of UK Prime Minister Boris Johnson and the European Commission President Ursula von der Leyen. The two met to discuss the Brexit situation and attempt to progress with a trade agreement between the UK and the EU. However, markets today have suggested that despite the optimism from both parties yesterday about the possibility of reaching a deal by the end of 2020, the EUR/GBP exchange rate has shifted in favour of the GBP. The Pound remains well supported in the global markets as the optimism surrounding business growth for the UK is on the rise and reaching a deal with the EU would help with clarity, lending more support to GBP. The Euro may have suffered as Von der Leyen suggested that there may not be enough time to agree on a full trade package but that both parties may have to prioritise the elements of trade which could be achieved in the short negotiation time.
Euro Looks to Extend Gains on USD
The EUR/USD exchange rate has rose to a trading level of 1.1118 (at the time of writing). The boost for the Euro has arrived as reports suggest that the decline in the German economy, the largest economy in the Eurozone, may be ending. The optimism in the support for the German economy gave the Euro a large amount of support as it may lead the way for the recovery of the Eurozone’s industrial sector as 2020 unfolds. Industrial production in Germany rose 1.1% for November month-on-month. Markets were expecting a reading of 0.7%. Economists at Pantheon Macroeconomics have suggested that the rate of decline in the German economy appears to be stabilising, which is positive news for the Euro.
If you would like to learn more about factors influencing GBP/EUR exchange rates for an upcoming currency transfer, feel free to contact myself, Jonathan Watson, using the form below.