December 21, 2017 - Written by
STORY LINK GBP EUR Exchange Rate Subdued after Deputy PM Sacking
The Pound Euro (GBP EUR) exchange rate is struggling to advance this morning following the sacking of first secretary of state Damian Green yesterday evening.
Pound (GBP) weakened by Green Sacking
Sterling appears to be on the back foot this morning after the firing of one of Theresa May’s closes allies yesterday after the first secretary of state and effectively the PM’s Deputy, Damian Green was ‘asked to quit’ after an inquiry found he had breached the ministerial code.
This comes as he was said to have made ‘inaccurate and misleading’ statements over allegations of pornography found on his office computer in 2008.
Green said in a statement yesterday;
‘I accept that I should have been clear in my press statements that police lawyers talked to my lawyers in 2008 about the pornography on the computers, and that the police raised it with me in a subsequent phone call in 2013. I apologise that my statements were misleading on this point.’
He is also under investigation over allegations of inappropriate behaviour made against journalist Kate Maltby in 2015, although Green denies any suggestion that he made unwanted advances towards her.
This is the third cabinet loss for Theresa May in the span of two months after both Sir Michael Fallon and Priti Patel were both forced to resign in November.
Investors fear that this will further weaken the UK government and its position in Brexit negotiations and could even lead to more conspiracies within the Conservative party to remove May as PM.
Green’s sacking will also be a blow for investors hoping for a ‘softer’ Brexit as, as a remain campaigner in the referendum he was a major voice in the cabinet against some of the more hardline leavers looking to cut all ties with the EU.
Euro’s (EUR) Bolstered by USD Weakness
Meanwhile the Euro remains on stable footing this morning following the dip in the US Dollar (USD) on Wednesday
With the EUR/USD cross being the single largest trade pairing for the ‘Greenback’ the single currency was the main benefactor from the Dollar’s weakness yesterday.
The drop in USD was comes as analysts suggest that the implementation of the Republican tax bill has already been priced into the US Dollar and there is little room for any upside movement should Trump sign the bill into law this week.
Further weakening the appeal of the ‘Greenback’ are concerns that the tax cuts will not deliver the miracle growth promised by Trump and could lead to the national deficit ballooning even further.
GBP EUR Forecast: UK GDP Figures to Bolster Sterling?
Looking ahead the GBP EUR Exchange rate may show some signs of life at the end of this week session as the UK publishes its latest figures for third quarter GDP, with economists forecasting that the final reading will show that the UK’s economic growth rose from 0.3% to 0.4% in the three months to September.
However the Pound may find its attempts to rally quashed by the accompanying Business investment figures as investment is expected to have slowed from 0.5% to 0.2% in the third quarter as Brexit uncertainty caused firms to become more cautious.
Meanwhile the Euro may find itself retreating later this afternoon with the publication of the Eurozone latest consumer confidence figures.
Analysts forecast that the sentiment index will have slipped from 0.1 to 0, falling back into neutral territory after registering its first positive reading in over a decade in November.
Current Interbank Exchange Rates
At the time of writing the GBP EUR exchange rate was trending around 1.1270 and the EUR GBP exchange rate was trending around 0.8875.
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TAGS: Pound Euro Forecasts