GBPEUR Bullish Ahead of BoE Governor Speech

GBP EUR Exchange Rate: Week in Review August 28th

The GBPEUR exchange rate was trading 0.25% higher on Monday at 1.1640 as the market absorbs recent trends. The Bank of England Governor Andrew Bailey will be the latest central banker to speak via a virtual event in a webinar led the Resolution Foundation.

Economic data is light for the pound to euro rate ahead of the European Central Bank (ECB) interest rate announcement on Thursday. The European Central Bank may look to cool the recent move higher in bond market yields.

Frost Seeks ‘sovereign equals’ After Trade Spat

Britain’s Chief Brexit Negotiator David Frost has spoken out about the recent efforts by the European Union to launch legal action. The decision was made England’s unilateral extension of Northern Ireland trade arrangements and led to EU threats. Frost said:

I hope they will shake off any remaining ill will towards us for leaving, and instead build a friendly relationship, between sovereign equals.”

The gloves are off after Brexit and Europe is relishing the chance to hit back at the UK for its decision to leave the union. The EU blocked shellfish exports to the UK, threatened vaccine blocks to Northern Ireland and is now seeking legal action over the Northern Irish extension.

The two sides are likely to descend into further disagreements despite the pleas of the Brexit negotiating team.

Bailey Could Move the Pound in Virtual Talk

The Bank of England Governor Andrew Bailey will speak today in a virtual event and this could add volatility to the GBPEUR.

Traders will be looking for an update on the bank’s outlook after the Boris Johnson roadmap. They will also be looking for Mr Bailey’s thoughts on the interest rate and stimulus outlook in light of the reopening, but also after the recent move higher in yields.

“We have quite a strong growth forecast for the U.S. for this year, or at least certainly when we did our forecast back in January, it was strong by comparison with others. The big question of course with the U.S. economy now going forwards is what the fiscal package ends up being. It is not agreed yet.”

The US Senate has agreed to the $1.9 trillion stimulus package on Saturday and it will move back to the house for approval. The latest stimulus binge will be flooding into markets soon and we will see how this affects markets in the weeks ahead.

The next big economic release for the GBPEUR rate will be Thursday’s ECB interest rate decision and the markets will be looking for an update on the ECB on the recent yield hikes. The central bank may announce a higher rate of weekly bond purchases to cool the recent bond market moves.

Get in touch ahead of the ECB rate decision to see how your upcoming currency exchange could be impacted.