The Pound to Euro (GBP/EUR) and Pound to Indian Rupee (GBP/INR) exchange rates were both trending higher in the morning of Monday’s European session as political jitters struck the market and investor demand for the US Dollar caused Rupee losses.
In the Eurozone, German Chancellor Angela Merkel has been attempting to forge a new coalition after the recent election, but the Euro has dropped as the attempts have collapsed. Overnight, the Free Democratic Party walked away from discussions with Merkel’s party, despite weeks of negotiations having taken place.
Discussions collapsed when Merkel failed to reach a compromise on the hot topic of immigration. Immigration has been eyed carefully since Merkel waved in a vast amount of migrants in 2015. US President Trump had stated that allowing the 1.3 million people influx was ‘insane’. It’s thought immigration had a large influence on citizens voting for Brexit, and other nations in the Eurozone such as France and the Netherlands have held elections this year that have seen an uprising in anti-EU establishments.
Elsewhere in the Eurozone, European Central Bank (ECB) President Mario Draghi will be offering up his views on the currency bloc after lunch as he’s scheduled to appear before the European Parliament Committee on Economic Monetary Affairs.
Meanwhile, the UK is gearing up for Chancellor to the Exchequer’s Budget statement this Wednesday. Some have speculated that this is a make or break move for Chancellor Philip Hammond who seems to be out of favour with pro-Brexit Tories. It’s expected the announcement could create some significant GBP movement.
The Indian Rupee ended last week at a one-week high after Moody’s Analytics upgraded India’s sovereign credit rating. Moody’s boosted the rating from Baa3 to Baa2 on account of changes made by Prime Minister Narendra Modi.
Moody’s said it forecast:
‘continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term.’
The Pound to Euro (GBP/EUR) exchange rate is trending in the region of 1.1248, around +0.44% higher. The Pound to Indian Rupee (GBP/INR) exchange rate resides at levels of 86.2180.