The euro has failed to make any gains on the Sterling as comments from European Central Bank (ECB) chief Mario Draghi weighed on market sentiment in the single currency. Mr Draghi signalled that the ECB could delay interest rate hikes to encourage economic growth within the bloc. Speaking in Frankfurt yesterday, he also pointed to wider concerns. He said: “The weakness in world trade has continued, which has significantly affected the manufacturing sector… “Global goods import growth in January reached its lowest level since the Great Recession on the back of rising uncertainty about trade disputes and a slowdown in emerging market economies, especially China.”
The pairing has fallen this morning despite some weaker-than-expected Spanish consumer price index figures for March, which came in at 0.4 per cent against the expected 1.6 per cent increase.
Sterling, meanwhile, is insipid today following last night’s parliamentary vote in which MPs rejected all 8 different proposals for Britain’s exit from the European Union.
Prime Minister Theresa May is now under increasing pressure to push forward with a Brexit deal that will win Parliament’s favour. However, with two previous failures behind her, this is leaving many pound traders feeling uninspired.
Hopes began to rise following comments from Boris Johnson, who said he would be willing to back Mrs May’s deal.
These hopes, however, were quickly dashed by the DUP, who said they would reject her deal.
Mrs May’s grand gesture to resign if her Brexit deal is passed effectively backfired as the DUP remained unmoved.
The Prime Minister said: “I have heard very clearly the mood of the parliamentary party.
“I know there is a desire for a new approach – and new leadership – in the second phase of the Brexit negotiations – and I won’t stand in the way of that.”
The possibility of a third ‘meaningful vote’ itself has even been called into question following comments from the House of Commons speaker, John Bercow, who said that the Brexit deal would have to be “substantially different”.
The pound euro exchange rate will remain fixated on Brexit developments today.
Nevertheless, any signs of the DUP – or a substantial number of MPs – showing any support for Mrs May’s deal could see Sterling climb.