Attention now rests on Theresa May who – provided with a series of “next steps” – must now attempt to gain support for her withdrawal deal both from Parliament and the EU.
Sterling, however, continued to fall despite better-than-expected UK GfK consumer confidence figures for February, which rose to -13 against January’s -14.
Joe Staton, Client Strategy Director at GfK, remained optimistic, saying: “It is worth bearing in mind that many economic indicators – employment levels, wage growth – remain positive. But it is frankly amazing that confidence is so stoic and stable in a world of sharp political instability and fear of the unknown.”
The euro, meanwhile, gained ground on the pound today following the publication of the French year-on-year CPI figures for February, which increased – slightly below consensus – to 1.5 percent.
French consumer spending, meanwhile, increased above forecast to 1.2 percent, further restoring market confidence in the euro.
Many euro investors, however, will be awaiting the publication of the German harmonised index of consumer prices for February today, and with any signs of an increase, this could provide some further uplift for the single currency.
Concerns over Italy still weigh on euro sentiment, however, with a spokesperson from the European Commission commenting: “Italy is experiencing excessive imbalances. High government debt and protracted weak productivity dynamics imply risks with cross-border relevance, in a context of the still high level of non-performing loans and high unemployment.”
Meanwhile, in Brexit news, last night saw the House of Commons vote on various amendments, with Labour MP Yvette Cooper’s proposal passing by 502 votes to 20.
This has lowered the likelihood of a no-deal Brexit and buoyed optimism on the possibility of a second referendum.
Labour leader, Jeremy Corbyn, meanwhile has voiced his backing of a second referendum, saying: “We will back a public vote in order to prevent a damaging Tory Brexit or a disastrous no deal outcome.”
The GBP/EUR exchange rate will be fixated on Brexit developments for the rest of the week, and with any signs of Mrs May’s deal gaining traction, the pound may once again soar.
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