GBP to Euro stumbled to lows last seen eight years ago following a combination of positive Euro data figures, continual Brexit uncertainty and an ever-strengthening Euro.
What triggered the GBP to Euro rate to fall?
The continual weakening of GBP to Euro began on Wednesday morning with the release of France and Germany’s manufacturing PMI data. The first to be released was France’s figure which exceeded it’s target of 54.5 reaching 55.8; the highest figure this year.
The German data was next to be published. Markets had been expecting German Manufacturing PMI to deliver a reading of 57.7, however, it comfortably exceeded its target achieving 59.4 seeing the GBP to Euro rate gain dramatically against the Pound.
Finally, markets awaited the data release which provides a manufacturing overview for the Eurozone as a whole. Once again, the monthly reading failed to disappoint reaching 57.4 the best performance since April 2011.
The strong Manufacturing Data was followed by a speech from Mario Draghi whereby he paid testament to the success of the Eurozone Quantitative Easing program. However, providing little by the way of hints as to the European Central Banks next move.
The continual Brexit uncertainties continue to weigh heavily on the pound and this week has been no exception. Next week the UKâ€™s Brexit committee will head to Brussels in order to continue negotiations with the EU. The Labour party are attempting to capitalise by issuing their willingness to sign a deal in order for the UK to remain in the single market. This particular headline accompanied by another in UK mainstream media states that Theresa May is considering stepping aside. The instability currently surrounding the Pound has never been greater.
GBP to Euro falls to lowest level in eight years
Following Draghiâ€™s speech on the triumph of Quantitative easing the GBP lost ground against a pool of currencies. With the effects of his speech and the release of the Eurozone data imposing themselves on the GBP to Euro rate. This saw the GBP to Euro fall to an eight-year low of 1.0831. in the following days the pound recovered slightly following its GDP target of 0.3% being achieved, however, losses are expected to continue next week as Brexit negotiations continue as will effects on the GBP to Euro rate.
In the following days the pound recovered slightly following its GDP target of 0.3% being achieved, however, losses are expected to continue next week as Brexit negotiations continue as does theÂ Euros desirability.
A handful of Tier 1 Banks are now predicting GBP to Euro Parity by as early as January and whilst the UK has provided some encouraging data, many will shy away for the GBP until more clarity on Brexit and Theresa Mayâ€™s government is provided.