The UK Prime Minster, Theresa May is going to be meeting EU leaders over in Brussels later tonight in what is being billed as the dinner to save her administration. After chief EU Negotiator Michel Barnier suggested talks were in deadlock last week Mrs May is going to try and move things along, enabling the UK to get trade deal negotiations started.
Whilst the UK Government have suggested this meeting was always in the calendar there is certainly a hint of panic and importance suddenly being thrust upon the occasion.
Consumer Price Index data to add drama tomorrow
Tomorrow one of the most awaited UK inflation data releases will be released and it is expected to see the level rise above 3%. The Bank of England have a target of 2% and as we currently sit above that there will be questions about the potential for an interest rate rise. Bank of England Governor Mark Carney has been vocal in suggesting he believes there will be a interest rate hike in November which is now only a few weeks away.
If there was to be a rate hike then the GBP/EUR exchange rate may move back up towards the 1.14 level, however many analysts believe the rate hike has been priced in to the Pound’s value when we previously saw the jump from below 1.10 to 1.14.
Should Theresa May report positive news following her dinner tonight, tomorrow could be a very positive day for Sterling. Even if the GBP/EUR rate managed to move back above 1.13 there would be some optimism that Sterling could soon see a run on strength.
There are some concerns for the Eurozone’s inflation levels which leaves the thought that the end of 2017 could start to have a positive finish for Sterling. If you can hold on for a few weeks it might be in your interest.