The Pound exchange rate has been steadily climbing in the last few sessions as optimism that the UK won’t crash out of the EU without a deal builds. Despite Theresa May’s deal being forecast with failure in garnering the support it needs, recent developments have limited the UK’s chance of a disorderly Brexit.
GBP/EUR, GBP/CAD, GBP/INR Exchange Rates Await Brexit Vote Outcome
Investors in the Pound exchange rate are awaiting the next stage of Brexit tonight when MPs vote on Theresa May’s deal. Although the deal is largely expected to fail, with some suggesting it could be the biggest parliamentary defeat in 95 years. Around 70 members of her Conservative Party and a number of other members of the Democratic Unionist Party which prop up the government, have announced they’ll be siding with the opposition, which could feasibly result in an embarrassing defeat with a margin of anywhere in the region of 150.
So far on Tuesday, the Pound to Euro (GBP/EUR) exchange rate is trading between levels of 1.1260 and 1.1221, climbing by around +0.28%. The Pound to Canadian Dollar (GBP/CAD) exchange rate has been slightly softer, trading between the boundaries of 1.7130 and 1.7037.
Global growth concerns were enough to see the Canadian Dollar to US Dollar (CAD/USD) exchange rate slip to its lowest level in six weeks on Monday as Chinese exports dropped.
Analyst Adam Button commented: ‘If Chinese growth is slowing as fast as it appears then the path is lower for the Canadian Dollar.’
Today, Canadian Existing Home Sales stats will be released for December, with forecasts suggesting a -1.0% contraction will take place following the previous month’s -2.3% dip.
German Growth Sinks Pressuring Euro and Indian Rupee Exchange Rate Tumbles
Meanwhile, German growth hit a five-year low in 2018, with the Gross Domestic Product (GDP) reading coming in at 1.5%, down from the previous 2.2%. The Federal Statistics Office stated: ‘The German economy thus grew the ninth year in a row, although growth has lost momentum.’ The office also said that growth is likely to be recorded for the fourth quarter, despite a contraction in the third, thereby avoiding a technical recession.
Factors contributing to the slowdown in German growth include weaker global expansion and tougher tests for car emissions which have been a hindrance to a number of German car manufacturers.
With 1.5% annual growth in 2018, it looks as if a technical recession in second half of the year was just avoided.
— Carsten Brzeski (@carstenbrzeski) 15 January 2019
The Pound to Indian Rupee (GBP/INR) exchange rate has also advanced today, trading between the interbank ranges of 91.6953 and 91.1438. The Rupee has also tumbled against the US Dollar on Tuesday on account of ‘chunky outflows’. The Reserve Bank of India (RBI) hasn’t intervened to defend the Indian currency, and the Rupee has reached its lowest level since December 18th of 70.99 against the US Dollar.