The Pound vs the Euro has been stuck in a very tight range since the middle of last week as the currency markets await the news from the latest Brexit talks.
The poor speech from Theresa May at last week’s latest Tory conference saw the Pound fall from its recent highs against the Euro and is now trading at its lowest level in almost a month.
The speech was blighted by a persistent cough as well as a member of the public presenting the Prime Minister with a fake P45 claiming to have been signed by Foreign Secretary Boris Johnson.
Also during last week there have been a few Tory members colluding to try and activate a leadership vote but over the weekend many senior Tories came out in defence of Theresa May which helped the Pound to stabilize vs the Euro.
Economic data that could impact GBPEUR exchange rates
The next set of economic data that could have an impact on GBPEUR exchange rates will come on Thursday when the latest set of Industrial Production for the Eurozone is published. Expectations are for a positive gain of 0.5% for the month of August so this could see the single currency strengthen vs the Pound later this week.
With the Bank of England’s Chief Economist and the Executive Director of Monetary Analysis and Statistics, Andy Haldane due to speak on Thursday this will be a precursor to what may happen on November 2nd when the central bank meets to discuss their latest interest rate decision. Although rumours are that the Bank of England may be gearing up for an interest rate hike I don’t think they are ready to change monetary policy just yet.
Clearly inflation is too high and an interest rate hike is usually used to combat rising inflation but with average earnings falling behind I think a rate hike could do real damage to UK economic growth.