Investors in the euro will be pleased to hear that the GBP has continued its decline against the Eurozone currency going into Tuesday. The GBP is performing sluggishly on the market after the third senior Bank of England (BoE) policy maker within a week hinted at a potential interest rate cut on the way for the pound sterling.
Bank of England Senior Policy Makers Hinting Towards Interest Rate Cuts, Positive News for EUR/GBP Rate
Gertjan Vlieghe, who is one of the BoE’s Monetary Policy Committee (who decide interest rates) members has mentioned that he would vote in favour of cutting the cost of borrowing for the first time since 2016 should the UK’s economic data releases continue their recent run of sluggish performances. However, Stephen Gallo, European Head of FX Strategy at BMO Capital Markets says that the pounds recent bout of weakness may be short-lived. He further noted that the Brexit process has “unearthed an important bias at the BoE” and suggested that they may be suffering from shock and denial on the Brexit process and in turn are looking towards an interest rate cut, even with a potential post-election pick up in the UK’s economy.
EU Set to Unveil ‘Green Deal’ Later Today
The EU recently hinted that it would unveil its ‘Green Deal’ this week, later today will see the presentation of the trillion-euro plan which is set to revolutionise the EU’s net-zero CO2 emissions by 2050. The plan could set the Eurozone apart from the rest of the world and allow it to lead the way in climate innovation. The deal is an ambitious rethinking of Europe’s economy, transport and energy sectors with an aim of reverting to cleaner technologies which will shape the coming decades. The topic will be a large and ongoing one for the Euro re-evaluation of most sectors that affect the Eurozone’s economic activity and GDP figures will be no easy task. But should the EU pull the plan off in a flawless manner, the economic impact could be one that is more efficient and in turn works out as a positive return for the EU and euro. The details from the plan will be revealed later today.
If you’re considering buying or selling sterling or euros and would like to compare rates or know more about the factors that could impact your exchange rate, feel free to contact me directly, Tom Holian. I look forward to hearing from you.