- Pound finds some support following May’s comments
- Pound recovers from its lows of 1.095
- UK Economic sentiment still a concern for investors
- Pound to Euro exchange rates could hit parity
After initially falling to new lows of 1.095 during yesterday’s trading day. GBP EUR has found support following comments from Theresa May who now looks to include parliament in Brexit negotiations. A welcomed move by investors who are concerned with the direction Brexit is going.
GBP EUR exchange rates are now trending nearly 2 cents higher than yesterday and with the Pound being driven by sentiment and political updates, further losses are likely with the invocation of Article 50 weighing in on investor confidence.
Quiet week for Sterling
With very little economic data for the UK this week, much of the movements will continue based on further updates on Brexit discussions and BoE Mark Carney’s speech on Thursday, which will be watched with scrutiny by investors. The UK has avoided signs of a recession up to now but members of the MPC have hinted that further cuts could be underway before the end of the year.
Furthermore, with the Pound’s value being driven by sentiment many will look to Carney’s outlook for the UK on Thursday, with the UK set for a hard(ish) Brexit this may dampen the mood amongst MPC members.
Will the Pound hit parity with the Euro?
It was suggested last year by UBS that the Pound could hit parity with the Euro in the wake of Brexit, and its looking more likely that this could occur in the months ahead. With a deadline now set for Article 50 and the UK looking to remove itself entirely from the EU, we could see a period when Pound to Euro rates are below 1:1. With little economic data this week the Pound sell-off could be set to continue especially given the strong economic data out of the Eurozone this morning.