If you’re interested in a Pound to Euro forecast, it could be useful to tell you that Sterling continues to struggle to find momentum, as the deadlock in Parliament over Brexit remains in place.
Focus now moves to the European elections to be held in less than a month, which could change the political playing field in Great Britain. The Conservative and Labour Parties are discussing proposals behind the scenes to try and reach some sort of compromise on a Customs Union, which has been championed by the Labour Party.
Reports suggest that these talks have hit a roadblock, with a difference of opinion on freedom of movement and the technicalities of how the Customs Union would in fact work.
The Brexit Party led by Nigel Farage is expected to perform extremely well in the European elections, and could shape the landscape of both Brexit and British politics. A strong win for Nigel Farage could put pressure on the government to opt for a harder type of Brexit, which could see rates for GBP to EUR fall further.
UK data has been upbeat this week after an impressive set of retails sales numbers, which rose for the first time in five months. The month previous had recorded the lowest levels for 18 months, so the recent data is welcome news for the UK economy. Despite the gains, the Pound struggled to make any gains against the Euro, with Brexit still dictating the direction of travel.
Is the Euro going up?
The Euro meanwhile fell to a near two-year low against the US dollar, highlighting how weak the single currency is. Much of the weakness stems from economic concerns within the bloc, with a number of the major economies performing poorly.
Germany in particular is proving to be a cause for concern, with a sharp deterioration in its manufacturing and industrial production sectors. German business confidence is also waning, which points to a weaker outlook for the powerhouse of the Eurozone economy.
Italy meanwhile has entered a recession and looks set to struggle, despite an injection of stimulus which has been approved by the Italian government. The level of debt that Italy is running is acting as a hindrance for the Italian economy, which leaves an uncertain outlook for Euro exchange rates for the medium term.