The Pound to Euro exchange rate soared last week, and even after sliding on Friday the pair trended in the region of €1.1646 – highs not seen in well over a year.
Investors piled into the Pound in the middle of the week as the UK government announced its next steps for the Brexit process. The government confirmed that if its Brexit plan is rejected again on the 12th of March it will offer UK Parliament votes on major issues like a potential no-deal Brexit or a delay to the official Brexit date.
This led to a decline in the odds of a no-deal Brexit and broadbased GBP gains.
Investors sold the Pound from its best levels in profit taking towards the end of the week. Other factors, like some weak UK manufacturing data and Friday’s Eurozone ecostats also pushed GBP/EUR from its best levels.
German retail sales rebounded to 3.3% month-on-month in January, well above the expected 1.9%. This, as well as some better-than-forecast Eurozone manufacturing data, bolstered hopes that the Eurozone economy is beginning to recover and supported demand for the Euro.
Britain Awaits Next Brexit Parliament Vote, Eurozone Data Takes Focus
The next big event on the table for the Brexit process will be the meaningful Parliament vote on the 12th of March. After this vote, MPs may be able to vote on issues like no-deal Brexit or a formal Brexit delay.
UK services stats due on Tuesday could cause some GBP movement if it surprises, but upcoming Eurozone data is much more likely to be of interest to traders.
Eurozone services PMIs and retail sales figures on Tuesday, followed by Eurozone growth and the European Central Bank’s (ECB) March policy decision on Thursday, are most likely to be influential to the GBP/EUR exchange rate.