Last night, the British Pound rose against the Euro (GBP/EUR) as parliament took control of Brexit. There are indicative votes scheduled for Wednesday, which will help to determine how the UK leaves the EU. This may open the door for a second referendum or even cancelling Brexit. It could also see the UK leave the EU without a deal, or the potential to remain in the customs union.
The idea was put forward by Oliver Letwin, once a Conservative MP, and 30 other Tory MPs rebelled against Theresa May to vote for his amendment. MPs backed it with 329 votes to 302. Richard Harrington, Alistair Burt, and Steve Brine resigned to vote for the amendment.
‘It’s essential we should be able to look at all the serious options, not wild unicorns, but things we could actually do to carry this process forward. We should allow ourselves a couple of days to do what should have been done over a couple of years.’
British Pound Exchange Rate Volatile on Brexit and Political Developments
Overnight, the British Pound retraced its gains but has begun the European session climbing against other currency majors. The Pound to US Dollar (GBP/USD) exchange rate has hit highs of 1.3222, while the British Pound to Euro (GBP/EUR) exchange rate has reached levels of 1.1685 so far this morning.
It’s a quiet day for UK economic data, but the February BBA Loans for House Purchase stat will be out this morning. The print is expected to come in at 39600 following January’s 40634. Additionally, Bank of England (BoE) Deputy Governor, Ben Broadbent, will speak on statistics in London today. However, given the political backdrop, this alone is unlikely to cause any major movement in the British Pound exchange rate.
Update: UK Mortgage Approvals Slump in February
The UK’s Loans for House Purchase figure came in at only 35300 in February, following January’s negatively revised 39560 and forecasts for 39600. Today’s figure is a six-year low and the slowdown has been attributed to Brexit uncertainty with buyers wanting to see how political developments unfold.
German Confidence Drops Adding More Weight to Struggling Eurozone Outlook
In the Eurozone, German Consumer Confidence numbers have shown a decline in April, adding more support to the view that the Eurozone economy is struggling. The ecostat slipped from a downwardly revised 10.7 in March, to 10.4 in April, despite forecasts to climb to 10.8. This is the weakest reading since late last year and it’s thought sentiment has been hit by Brexit and ongoing trade tensions between the US and EU. Yesterday, economic data had shown a surprise surge in business optimism. Meanwhile, French growth figures for the final quarter of 2018 showed 0.3% expansion.
The US has a raft of data due out today, including Housing Starts, Building Permits, and Consumer Confidence, which may impact the US Dollar to Pound (USD/GBP) and US Dollar to Euro (USD/EUR) exchange rates.