GBP/EUR & EUR/GBP Weekly Forecast
Good afternoon everyone,
The main event for the GBP/EUR exchange rate this week will be the testimony from the Bank of England governor Mark Carney at the Parliamentary Treasury Select Committee. This will take place on Wednesday and topics covered are inflation and economic outlook. Any positive or negative comments will see movements in the GBP/EUR exchange rate. Some recent comments from Carney we're not the most reassuring saying the likelihood of a "no-deal" Brexit were "uncomfortably high" and that this presents a risk to the economy.
There are no major UK economic data releases this week which means Sterling markets will remain focused on Brexit-related news. The EU’s chief negotiator Michel Barnier and UK Brexit Secretary Dominic Raab are due meet this week so once again we may or may not get an update in the form of a press conference from either Barnier or Raab. Barnier has made comments on social media before after similar meetings so unexpected updates could come at any time.
The main release for the Euro in the week ahead is manufacturing and services PMI Data for the month of August, out at 9.30am B.S.T on Thursday. Analysts are now suggesting that they don’t expect the Turkish crisis to have a material impact yet on business confidence and look for slight improvements in this economic data.
GBP/EUR & EUR/GBP Movements
The bad news for anyone looking to do GBP/EUR exchanges is that we are still many weeks away from getting clarity the markets desire with the October European Union summit seen as being the key Brexit event on the horizon as it is here that European leaders will agree on whether or not to OK a Brexit deal with the UK. There is rumours circulating that PM May is looking for an emergency summit in November. Once again pushing the Brexit can down the road a little further.
Again, the good news for anyone looking to do EUR/GBP exchanges is that could see the GBP/EUR rate hit new lows and test key levels which could see the rate move into the €1.10’s again. Over the last 2 weeks we’ve seen this tested and if not for the Turkish crisis weakening the Euro we could easily be looking at rates below €1.10.
Current key trading level is now at €1.1080 (If we see the rate move lower than this level for a sustained amount of time, then the likelihood of the rate moving below €1.10 will be quite high).