Sunday, September 15, 2019
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Pound euro exchange rate: GBP/EUR rises as July’s UK growth figure tames Brexit recession | City & Business | Finance


However, Suren Thiru, the Head of Economics at the British Chambers of Commerce (BCC), was downbeat in his assessment: “Although there was a rise in GDP between June and July, the zero growth recorded on the underlying three-month measure points to an economy under pressure from uncertainty over Brexit and weakening global economic conditions.” July’s month-on-month manufacturing production figure also beat consensus, rising from -0.2 percent to 0.3 percent, providing further evidence of a recovering British economy. Brexit news continues to dominate as UK markets brace for royal assent for the anti no-deal Brexit bill which passed through the House of Commons last week.

If the bill is approved it will require by law that Prime Minister Boris Johnson request a three-month extension to the October 31 Brexit deadline. 

However, Mr Johnson continues to show signs of refusing to comply with the bill while the Conservative Party insists upon honouring the October leaving date. 

Nevertheless, we could see the pound continue to edge higher against the euro as no-deal Brexit fears recede. 

The euro failed to gain on the pound despite July’s German trade beating forecasts and widening to €20.2 billion this morning, with exports unexpectedly increasing on the month. 

Carsten Brzeski, an Economist at the financial services company ING, was pessimistic about the German economy in the third-quarter: “At least some relief for the economy, as exports increased in July. The outlook, however, has not improved.”

“This is not just because of the ongoing conflict but also because of a possible conflict between the US and the EU, with President Trump already joking about tariffs on cars, and future trends in the Chinese market for automotives.”

In European political news, Italy’s newly formed coalition – with two fundamentally opposed parties – continues to haunt markets, with the staying power of the Italian government a primary concern. 

The pound euro exchange rate could continue to improve if the UK anti-no-deal bill gains royal assent today, as this will boost confidence in a possible Brexit extension until January 2020.



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