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GBP/EUR Exchange Benefits from Talk of Financial Services Deal

Last week’s high: €1.1580

Last week’s low:  €1.1006

Pound Ends Week on a High Note as BoE and Brexit Give Boost

The Pound Euro exchange rate was on something of a roller coaster rise last week but ended up close to its opening levels.

Sterling saw some weakness early on in the week but was buoyed by some unexpectedly weak Eurozone GDP growth. Q3 figures came in at a rate of 0.2% – half of the expected 0.4% and sparking market fears of a gathering slowdown across the bloc.

At the same time the German Chancellor Angela Merkel announced that she would be stepping down at the end of her term following some disastrous regional election results.

The Pound then sank on some weaker-than-expected retail figures before bouncing back strongly on reports that Theresa May could have secured a deal for the UK financial services sector granting it access to European markets after Brexit.

This was swiftly followed by the Bank of England talking up the UK economy after the latest rate meeting (no change), hinting at the possibility of raising interest rates even in the event of a no-deal Brexit.

EUR Outlook: All Eyes on PMI Data

Looking ahead PMI data will be in focus today, with the high-impact UK services reading due out at 9:30.

Current forecasts are for a slight rise in the pace of sector activity, which could be all that’s needed to boost Sterling against the Euro.

Tomorrow will see the release of October’s Eurozone services and composite PMIs, with no change currently forecast.

 

Key Events

5th November

09:30 UK Services PMI (Oct)

6th November

09:00 EU Markit Services and Composite PMI (Oct)

7th November

08:00 EU ECB meeting – non-monetary policy (Sep)

8th November

09:00 EU Economic Bulletin

9th November

09:30 UK GDP Estimate (Q3)

 

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To keep up to date with the Euro, visit the Euro Blog in our Currency News section.

 

James Spurway

Currency Trader

jas@fcgworld.co.uk

 

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