Pound euro exchange rate: GBP rallies as Theresa May heads back to Brussels

Some better-than-expected German Gfk consumer confidence likely increased sentiment for the euro. Instead of falling further in February, the figure rose to 10.8, the highest reading since May 2018. At the same time, French GDP figures came in at a steady 0.3 per cent for the last quarter of 2018, relieving fears that the ‘Yellow Vest’ protestors had caused widespread economic damage to the economy. Some analysts, however, were not so sure.

They pointed out that almost all of the French GDP growth could be ascribed to increasing exports of machinery and naval equipment, while other areas of the economy suffered.

This was borne out in France’s consumer spending figures, which revealed a sharp contraction of -1.5 per cent in December.

UK mortgage approvals likely aided Sterling in its push back against the euro, as approvals in December rose above expectations.

Yesterday evening’s parliamentary drama saw both the ‘Cooper’ and ‘Grieve’ amendments defeated, although the ‘Brady’ amendment, which proposes to replace the Irish backstop with alternative arrangements, was passed by MPs.

In a relatively successful night for Theresa May, the Government was able to defeat attempts by MPs to take control of the Brexit process from the government.

Although the pound euro exchange rate took something of a hit immediately afterwards.

The likely cause of the drop in sentiment for the pound was the immediate response from European Council President Donald Tusk, who stated firmly that the EU was not prepared to reopen negotiations.

A spokesman for Mr Tusk said: “The withdrawal agreement is, and remains, the best and only way to ensure an orderly withdrawal of the United Kingdom from the European Union.

“The backstop is part of the withdrawal agreement, and the withdrawal agreement is not open for renegotiation.”

Mrs May is now expected to continue discussions with EU leaders over the next few days, which will likely cause movement in the GBP/EUR exchange rate.

source: express.co.uk