The Pound to Euro (GBP/EUR) exchange rate was trending higher at the start of Tuesday’s European trading as investors awaited the Spring Statement delivered by Chancellor to the Exchequer, Philip Hammond.
Hammond’s Spring Statement – What to Look For
The November economic growth outlook was less than inspiring, with growth in 2018 forecast to reach 1.4% while 2017 was expected to grow by only 1.5%. However, since Hammond’s previous Budget statement, the Office for National Statistics (ONS) has revealed economic growth actually attained 1.7% in 2017. The statement is also expected to cover the UK’s productivity which will be interesting given that the International Monetary Fund (IMF) recently stated that the UK must boost its productivity.
Government borrowing and national debt will also be covered in today’s statement, as well as a quick overview of possible consultations for tax changes.
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— HM Treasury (@hmtreasury) 13 March 2018
GBP/EUR Exchange Rate Climbs as Brexit Transition Deal Within Reach
The Pound to Euro (GBP/EUR) exchange rate has made gains in Tuesday’s session as British Brexit negotiators suggest that a transition deal is close. One politician close to the matter, Robin Walker, stated: ‘We recognise how important it is to secure the deal on the implementation period as soon as possible. I want to stress that we are very close to a deal at this time.’
If a transition deal is secured, the Pound may experience a rally against both the Euro (GBP/EUR) and US Dollar (GBP/USD) and may even be able to break the psychological barriers or 1.14 and 1.40 respectively, creating headway for some stability.
It’s a light week for data releases from the UK and EU, but European Central Bank (ECB) President Mario Draghi will be speaking on Wednesday and could create some EUR/GBP market movement. Additionally, Eurozone Industrial Production and the final Eurozone Consumer Price Index (CPI) numbers for February will be out this week which could create other fluctuations.
The Pound to Euro (GBP/EUR) exchange rate is currently trending at 1.1261, with session highs of 1.1281.