Published On: Tue, Sep 24th, 2019

Pound euro exchange rate rises after UK Supreme Court rules Parliament suspension unlawful | City & Business | Finance

As a result, the pound benefited from easing no-deal Brexit fears, with Parliament now due to reopen after House of Commons Speaker John Bercow called for it to reconvene as early as tomorrow.  Mr Bercow commented: “I don’t think the justices remotely excluded the possibility of having a Queen’s speech but what we will certainly do is ensure Parliament has plenty of time to debate Brexit.”  Now that Boris Johnson can be more effectively challenged on his hard-Brexit stance ahead of the October 31 deadline, UK markets are now more confident that a no-deal can be avoided. 

In UK economic news, August’s public sector net borrowing rose to a less-than-expected £5.766 billion, although this left the pound unmoved as traders now await the Office for Budget Responsibility’s (OBR) updated forecasts. 

Meanwhile, the euro failed to benefit after September’s German IFO business expectations fell below forecast from 91.3 to 90.8 – a ten-year low.

Germany’s IFO business climate index, however, rose by 94.6. 

Analysts at Reuters were downbeat: “Much of the German economy’s fortunes are tied up in factors beyond its control: mainly weaker global growth, developments in the U.S.-China trade conflict and the question of whether Britain can achieve an orderly exit from the European Union.”

Consequently, the European currency continues to struggle against the pound as concerns over the Eurozone’s powerhouse economy weigh on the bloc’s market sentiment. 

Any further signs that the German economy will contract in the third quarter this week could weigh heavily on the single currency. 

The GBP/EUR exchange rate could likely hold onto today’s gains if the Conservative Government is challenged on its hard-Brexit stance during the reopening of Parliament tomorrow.  

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