The euro failed to make any headway on the pound today despite French consumer confidence for February climbing to its highest since October – the period prior to the ‘Yellow Vest’ protests.
These figures reassured some euro investors that the Eurozone is showing signs of a recovery. However, this was not enough to see it gain on the pound this morning, which hit a fourteen month high.
Sterling rallied today ahead of Prime Minister Theresa May’s speech, following Labour’s surprise announcement that it would move to back a second-referendum.
Labour leader Jeremy Corbyn said: “[I]n line with our conference policy, we are committed to … putting forward or supporting an amendment in favour of a public vote to prevent a damaging Tory Brexit being forced on the country.”
With some Conservative ministers also threatening to resign, Mrs May is coming under increasing pressure to remove a no-deal Brexit from the table.
Reports also suggest that the Prime Minister may also extend Article 50. This has buoyed the pound today as the Brexit deadlock is being increasingly challenged.
Three Conservative junior ministers, Richard Harrington, Claire Perry and Margot James, have threatened to resign if Mrs May fails to remove a possible no-deal, saying in a joint statement: “[Removal of the no deal] would be greeted with relief by the vast majority of MPs, businesses and their employees.”
Neil Wilson, a Chief Market Analyst at Markets.com, remained cautious, saying: “If no deal is abandoned, it would likely entail a delay to Brexit, and whilst assuaging concerns about crashing out without a deal in place, it would not remove all the uncertainty.”
Wednesday, meanwhile, will see Labour MP Yvette Cooper’s amendment put forward that effectively allows MPs to take back power if a deal is not forthcoming by 13 March, and with the mounting challenges to a no-deal Brexit the pound has benefited against the single currency.
Many pound investors are awaiting the Treasury Committee’s inflation report hearings today, and with any bullish news about the UK economy, this could further bolster the GBP/EUR exchange rate.