Pound/Euro rises to €1.1350
The Pound/Euro rate has risen to €1.1350 over the last 24 hours, strengthening on optimism that Brexit talks will make progress this year. There were some concerns that the government re-shuffle might weaken the Pound, but actually not too much has changed, and continuity is usually a good thing for a currency, so the lack of any significant changes in key positions has helped support the Pound.
Meanwhile, the Euro has weakened slightly despite EU economic data continuing to impress. Despite this, markets are not particularly favouring the single currency at the moment, due to the fact their stimulus measures are likely to remain in place for some time.
UK data tomorrow to provide direction for Sterling
Looking forward, there isn’t much on the agenda today to cause much movement in the GBP/EUR pair, so I would expect it to remain comfortable above the €1.13 mark. Tomorrow however there are some key releases that could favour the Pound further. At 09:30am tomorrow morning we will see the latest Industrial and Manufacturing production figures, and they are expected to show month on month growth of 0.3%. If the actual number matches or exceeds this, it will indicate the robust health of these sectors and could push Pound/Euro rates towards €1.14.
Pound/Dollar close to 18 month high
Elsewhere, the Pound/Dollar rate is holding firm above $1.35, very close to the best it’s been since the EU referendum. It’s likely however that this paid may drop in the short term, as many investors are starting to become bullish on the US economy. If the US continues to raise interest rates this year, it could give the USD further strength.
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