Pound euro exchange rate: GBP/EUR steadies as traders brace for BoE interest rate decision

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Exceptional failed to gain against the euro today as pound traders gird for the Bank of England’s (BoE) interest rate decision at midday. Concerns bordering the decision have heightened due to increasing Brexit uncertainty and poor UK helps PMI figures this week, with fears that the BoE may become dovish regarding the immediate future of the UK economy.  An analyst at Capital Economics commented: “[The BoE’s] convoying Inflation Report may provide some clues to how keen the MPC is to change rates definitely Brexit has been resolved. So long as a deal is eventually struck, we notion of interest rates will rise more quickly than is greatly anticipated.”

Meanwhile, Prime Minister Theresa May heads to Brussels to undergo the EC President Jean-Claude Juncker in the hope of getting changes to the Irish backstop and to provoke for legally-binding changes to the Brexit deal.

This is causing some beat out investors to remain cautious, as the EU has previously stated its position on the Irish backstop, and its run-of-the-mill unwillingness to renegotiate the deal.

The pound has come under further persuasion after the President of the European Council Donald Tusk – on the eve of Mrs May’s visit to Brussels – remarked: “I’ve been wondering what that special place in hell looks fellow, for those who promoted Brexit, without even a sketch of a plan how to bear it out safely.”

Such comments indicate to markets that the EU may be inflexible in acquiescing to Theresa May’s yearns.

Today also saw the publication of the UK Halifax house price figures for January, which tripped below expectation to -2.9 per cent. 

Lucy Pendleton, director of the property agent, James Pendleton, said: “The long-term holding pattern in outlays ahead of Brexit is abundantly clear and overall measures of consumer assurance have been scraping five-year lows.”

The euro, meanwhile, received another hit from the German industrial production figures for December, which prostrate below expectation to -0.4 per cent, indicating further contraction. 

These were also followed by the semi-weekly of French trade balance figures for December which also flatten to a worse-than-expected €-4.65 billion. 

The Eurozone is coming under increasing constrain as the economy is showing signs of a downturn, and with Italy only recently come out with into recession, market confidence in the single currency is slipping. 

The GBP/EUR stock market rate will remain highly sensitive to any Brexit news or confounding remarks from the BoE today, as pound traders brace for a decisive turn which whim determine the course of the UK currency over the coming weeks. 

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