Euro to Pound Exchange Rate Unable to Recover Weekly Losses despite Brexit Jitters
No-deal Brexit jitters have been flaring up again in recent sessions, but the Euro Pound (EUR/GBP) exchange rate has been struggling to recover much. The Euro (EUR) has seen mixed demand, but is weighed by Eurozone data today.
Since opening this week at the level of 0.8934, EUR/GBP has been trending with a downside bias. Earlier in the week, EUR/GBP touched on a fortnight low of 0.8870.
Since then though, uncertainties in the Brexit outlook have been dragging Sterling lower again. At the time of writing, EUR/GBP trends in the region of 0.8914.
EUR/GBP still remains below the week’s opening levels. This is because weak Eurozone data and Brexit hopes are keeping the pair under pressure.
Euro (EUR) Exchange Rates Struggle to Recover as German Confidence Misses Mark
Optimism that the EU was handling a second wave of coronavirus infections well has softened, and markets are becoming more anxious about how hard the virus will hit the Eurozone over the holiday period.
Today’s German and French confidence stats were also disappointing. They indicated that these major economies were not weathering the pandemic as well as hoped.
German consumer confidence report from GfK worsened to –6.7 below the expected –5, and French consumer confidence slipped to 90 rather than the expected figure of 92.
Pound (GBP) Exchange Rates Knocked by Brexit Jitters, but Losses Limited
Earlier in the week, investors bought the Pound on hopes that the UK and EU were on the cusp of agreeing a Brexit deal.
However, no progress on negotiations has been reported. In fact, some believe that the latest round of talks has not been hugely productive, as some officials have taken more negative stances on relations.
This has left te Pound less appealing. The Euro has been able to recover against Sterling since yesterday as a result.
Yohay Elam, Analyst at FXStreet, said:
‘media reports suggest that he (EU Chief Brexit Negotiator Michel Barnier) may call off his trip if the UK does not offer concessions. Investors need to see negotiations continue to remain hopeful.’
Euro Pound (EUR/GBP) Exchange Rates Could Strengthen if Eurozone Data Impresses
The Euro to Pound exchange rate’s advances have been limited due to weakness in Eurozone confidence data today.
As a result, tomorrow’s key Eurozone stats could boost the Euro if they beat expectations.
Key French stats will be published, including the latest inflation and growth results. German import prices data will also be watched.
Overall Eurozone consumer and business sentiment figures could weigh on the Euro if they disappoint like the other confidence figures did however.
As for the Pound, it will continue to be influenced by Brexit developments. If UK and EU officials take a more optimistic tone on talks, markets could become more hopeful as well, which would boost GBP.
On the other hand, the Euro Pound exchange rate could recover more easily if no-deal Brexit fears or UK coronavirus fears worsen.
