The sterling to euro exchange rate stands at 1.1862 today, on the interbank exchange. This is very close to yesterday’s peak of 1.1867, the pound’s strongest against the Eurozone’s common currency in five weeks, or since December 17th.
Sterling has strengthened versus the Eurozone’s common currency, in part because yesterday the UK’s Chancellor of the Exchequer, Sajid Javid, said that the UK and EU can reach a comprehensive trade deal in 2020. Speaking on Wednesday, Mr. Javid said that “There is a strong belief on both sides that it can be done. Both sides recognise that it’s a tight timetable, a lot needs to be done. It can be done. And it can be done for both goods where we want to see zero tariffs and zero quotas, and also services.” This has lifted the pound, because Mr. Javid’s comments contrast with his previous remarks earlier this month, in which he suggested that the UK will diverge from the EU in the coming trade talks.
GBP to EUR Rises as UK Public Borrowing Below Forecasts in December
In addition, the GBP to EUR interbank exchange rate has also risen, because this week we’ve learnt that the UK’s Public Sector Net Borrowing fell in December. According to the Office for National Statistics (ONS) on Wednesday, the UK government borrowed just £4.04 billion last month, below economists’ predictions for £4.6 billion. This has lifted the value of sterling, because when the UK government borrows less, Britain’s national debt rises less quickly. In turn, this could give the Chancellor Mr. Javid the room to invest in the UK’s infrastructure, when he announces the Budget in March. Traditionally, higher government investment contributes to the UK’s economic growth, thereby lifting the pound.
ECB’s Lagarde Could Reveal Details of “Strategic Review” – Potential Volatility for the Euro
Looking to later today, the European Central Bank (ECB) announces its latest interest rate decision at 12.45 GMT. The Eurozone’s central bank is being tipped to keep interest rates at their all-time low of 0.0%. However, new President Christine Lagarde could reveal more details of the ECB’s “strategic review”, which could be worth watching for its effect on the euro.
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