GBP EUR exchange rates have dropped from their recent high with levels for this pair currently sitting at 1.1260. Brexit uncertainty this week has resurfaced as the Brexit negotiations have resumed and the dialogue has not had the best of starts. The issue of citizens rights during the transitional period and whether or not financial services will be included in any future trade deal will almost certainly be sticking points in this round of negotiaions. Recent reports that the EU will seek to have punitive measures in place should Britain infringe EU law are also likely to prove politically explosive and until the outlook on Brexit looks more optimistic the pound is likely to remain under considerable pressure.
UK data is light today so focus will move to central bank meetings and commentary.
The Bank of England meet on Thursday to decide on interest rates although expectation is that there will be no change this month. Bank of England Governor Mark Carney may however offer some clues on Brexit which may have an impact on GBP EUR. The Governor often moves into political territory and such comments could see the pound react. A positive Mark Carney on Thursday could help to see the pound pick up against the Euro.
Four US Federal Reserve members will be speaking later today which could have an impact on USD EUR exchange rates. At the last Fed meeting the tone was upbeat with a view that interest rates would need to rise in the US as was previously expected. The markets are looking at two or possibly three rate rises throughout 2018 and this is likely to help see the dollar rise against the Euro. There is currently a good opportunity for those clients looking to sell Euros for dollars at the moment although further tightening of policy from the Fed could see the Euro reverse its fortunes against the dollar.
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