Alexander Krueger, an economist at Bankhaus Lampe, remained stoic, saying: “At the moment it remains the case that the downward trend does not yet contain any potential for causing drama.” Many euro traders, however, are skittish following signs that the Eurozone is slowing, and with the European Central Bank slashing its growth forecast just yesterday, today’s German industrial figures have become a cause for concern for the bloc. These losses were offset slightly by the publication of Italy’s industrial output figures for January which improved at 1.7 per cent.
The euro has since benefited from safe-haven demand following the shocking 21 per cent plunge in China’s exports for February – its weakest monthly performance since 2016 – and stabilised against the pound today.
The pound, meanwhile has stabilised after Prime Minister Theresa May urged the EU to concede on changes to the Irish backstop, saying the EU could have a “big impact on the outcome” of the ‘meaningful vote’ on Tuesday next week.
This has continued to cause concern for Sterling traders, however, with no forthcoming consensus having emerged from talks between the UK Attorney General, Geoffrey Cox, and the EU’s Brexit Negotiator, Michel Barnier, in the past few days.
A spokesperson for the European Commission said on Wednesday that no solution had been identified, and with the clock ticking down to the vote on 12 March, pound traders are becoming increasingly nervous that Mrs May’s deal will be rejected by the House of Commons.
There are no significant UK economic data releases today, with the GBP/EUR exchange rate remaining fixated on Brexit developments instead.
Any further signs of a lack of consensus emerging from UK-EU negotiations over the Irish backstop could see more volatility for the pound euro exchange rate.
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