While the pound weakened yesterday in response to further Brexit uncertainty, the euro benefited from the release of better-than-expect German data. However, while the German IFO business confidence indexes showed improvement, today’s GfK consumer confidence gauge did not. The sentiment index came in at 10.4 rather than 10.8. Rolf Buerkl, a researcher at GfK, underlined a number of factors.
He said: “The lack of decisiveness regarding the nature and date of the UK’s exit from the EU, as well as the growing trade conflict between the EU and USA are clearly creating ever more uncertainty among consumers. Barriers to trade, such as increases in customs duties, are currently creating a burden for German exports.”
This data was followed by final French growth data.
On a year-on-year basis GDP came in at a slightly better-than-expected 1.0 percent.
Meanwhile, Brexit uncertainty continues weighing on the pound today following last night’s vote in the House of Commons.
A majority 329 to 302 vote against the government has effectively allowed MPs to take control of Brexit.
Wednesday will now see MPs vote on a number of alternatives to Prime Minister Theresa May’s Brexit deal.
The SNP’s Joanna Cherry said: “It isn’t just Wednesday.
“Now that Parliament has control of the order paper… on Wednesday Parliament could award itself another day and so on and so forth.
“The consensus we are now trying to build is something Theresa May should have reached out to try to build two years ago.”
However, Mrs May has previously mentioned that she might not abide by the outcome of these “indicative votes”.
Many MPs have warned there would be “uproar” if these were simply ignored by the Government.
Mrs May has come under increasing pressure after 29 Tory MPS voted in favour of the Letwin amendment which allows MPs to take control of Brexit.
Three ministers have also resigned in support of the amendment.
Tory rebel MP, Dominic Grieve, captured the mood of yesterday’s vote, saying: “Seeing that the government has run into the sand, and has had its deal rejected, we have got to find an alternative.
“There should be nothing that is forbidden to be discussed.”
The pound euro exchange rate will remain sensitive to Brexit developments ahead of tomorrow’s important vote.
Any indications that a no-deal Brexit could be taken off the table could prove pound-positive.
Published at Tue, 26 Mar 2019 12:03:00 +0000