Pound euro exchange rate: GBP rallies on final day of trading in 2017 | City & Business | FinanceHeat Profit
GBP/EUR is currently at around €1.127, up by around 0.1 per cent from this morning’s starting levels at around €1.126.
The euro is subdued this morning as Italian President Sergio Mattarella formally dissolved the Italian parliament in preparation for the general election next year.
Prime Minister Paolo Gentiloni and his cabinet confirmed that the vote will take place in a little over two months’ time on the 4th of March.
While any general election is a source of uncertainty for Investors there are particular concerns over the Italian election due to the political climate in the country.
The main concern for Markets is the popularity of the Five Star Movement, a Eurosceptic party that wishes to renegotiate a number of European treaties and is seen as a possible threat to the stability of the Eurozone.
Meanwhile, further pressuring the euro this morning is the release of Germany’s latest CPI figures later this afternoon.
The preliminary CPI reading is expected to reveal that inflation sank from 1.8 per cent to 1.5 per cent in Germany year-on-year last month.
This will come as a further blow to those hoping another robust reading would help Eurozone inflation edge closer to the European Central Bank’s target rate of 2 per cent.
At the same time the pound is being supported this morning by comments from the Irish Minister for Foreign Affairs, Tánaiste Simon Coveney, who suggested that UK should be granted concessions from the EU should it pursue a ‘soft’ Brexit.
Mr Coveney suggests that such a deal would be unique to the UK and offer a stronger relationship than that the EU holds with Norway.
Norway has access to the single Market without being a member of the EU.
Such a deal would alleviate a lot of uncertainty about Brexit and prevent UK businesses from losing easy access to the European Market.
Looking ahead to next week, the GBP/EUR exchange rate may be able to get off to a strong start in 2018 with the release of the UK’s latest manufacturing PMI on Tuesday.
Economists are forecasting that factory activity in December will have held close to the multi-year high struck in November.
At the same time the Eurozone will release its own manufacturing PMI at the start of next week’s session, with the final reading expected to confirm that the index struck an all-time high of 60.6 last month, strengthening the euro