GBP/EUR: Pound Strengthens Ahead Of Parliammentary Brexit Vote
  • Pound (GBP) falls after 2-days of gains
  • This is a quiet week for UK data
  • Euro (EUR) fells after weak German data
  • ECB rate decision tomorrow

The Pound Euro (GBP/EUR) exchange rate is falling after two days of gains. The pair rose 0.6% in the previous session, settling on Tuesday at €1.1667 and trading in a range between €1.1576 – €1.1677. At 06:35 UTC, GBP/EUR trades -0.054% at €1.1663.

The euro tumbled in the previous session after weaker-than-expected German business sentiment data and after the ECB’s euro area lending survey show the firm’s demand for credit dropped to its lowest since 2003. The tightening credit conditions come as the ECB continues to raise interest rates and is expected to raise rates by a further 25 basis points on Thursday.

German Ifo business climate index deteriorated further in July, dropping to 87.3. This was down from 88.6 in June and March, the third straight month of falling business confidence. The soft business confidence comes after disappointing PMI releases earlier in the week showing a deceleration in both manufacturing and services.

The data increasingly point to a prolonged recession in Germany and could impact the ECB’s future plans for interest rates.

There is no high impacting eurozone economic data due to be released today the ECB interest rate decision will be announced on Thursday. Expected to raise rates by 25 basis points, there are some doubts as to whether rates will be raised again in September.

The pound pushed higher in the previous session, boosted by a report from the Confederation of British Industry which suggested that the downturn in the manufacturing sector could have passed its worst.

British manufacturing orders declined in July at the slowest pace this year. New orders rose to -9 from -15 in June.

The data came after UK PMI figures yesterday, which painted a bleaker picture.

There is no high impacting UK economic data, which is due to be released today in fact, this week is a quiet week for UK economic data. Instead, attention will be turning to the Bank of England interest rate decision next week.