THE pound euro exchange rate has managed to find firmer ground ahead of the long bank holiday weekend after dropping half a cent yesterday in reaction to the government’s no-deal Brexit papers. So far today the pound euro exchange rate has been lingering around the day’s opening levels of €1.109.
Yesterday’s “worst-case scenario Brexit” plans were released to inform consumers and businesses about how to prepare for a no-deal split.
Despite UK Brexit Secretary Dominic Raab stating in an accompanying speech that the papers would be “rendered redundant” if the UK and EU came to an agreement, Sterling still saw a sharp decline.
Scotland’s First Minister Nicola Sturgeon stated in a heated tweet that a “no deal Brexit would be an unmitigated disaster – and the fact that UK [government] is even talking about it is evidence of their abject failure”.
Nevertheless, politicians seem hopeful that a deal is likely, with negotiations currently ongoing.
Economists were anticipating a chance of the pound making some headway this morning courtesy of the UK’s mortgage approvals numbers for July, but the figure fell short of expectations at just 39.584k, despite a forecast of 42.5k.
While this hasn’t noticeably impaired GBP this session, it’s likely that any impact this data would have had has been overshadowed by intensifying Brexit jitters.
On the other side of the pairing, the euro made progress yesterday thanks to the latest Eurozone PMI’s, which forecast growth in the bloc to have remained steady in August.
However, this was tempered by a less optimistic outlook for future growth due to this month boasting one of the lowest rates of expansion seen in the bloc of late.
It came as company optimism fell to its lowest rate in almost two years due to current geopolitical and economic instability.
This, along with this morning’s lacklustre German GDP figure for the second quarter, has seen the pound euro exchange rate trade within a narrow range so far this session.
Looking ahead, both currencies may struggle today, with the session marked by a noticeable absence of UK and Eurozone data, which could see the pairing fluctuate as investors eye Brexit developments and the ongoing trade spat for signs of instability.