November 19, 2018 - Written by John Cameron
STORY LINK Pound to Euro Exchange Rate: Brexit Uncertainty Reaches Temporary Stasis, Pound Sterling Firms
GBP/EUR Exchange Rate Finds a Firmer Footing as May’s Brexit Deal is Absorbed
The Pound to Euro (GBP/EUR) exchange rate started today quite strongly, climbing 0.29% to trade in the region of €1.1260.
Sterling has benefitted from markets and politicians taking a breather as they continue to digest Prime Minister Theresa May’s draft Brexit deal, allowing for a brief return of stability.
Demand for the Euro (EUR), meanwhile, remains limited as Italy’s stand-off over its budget continues.
Pound Sterling Recovers from Worst Levels after Week of Brexit Chaos
The Pound Sterling Euro (GBP/EUR) exchange rate stabilised after Sterling plummeted last week, with Environment Secretary Michael Gove’s decision to remain in cabinet lending support to Pound over the weekend.
Theresa May’s draft Brexit deal remains in focus but the situation appears to have calmed for now.
May is due to make a speech today at the Confederation of British Industry (CBI) conference and if the speech is well received it could give the Pound a little leg up.
May recently said of the Brexit deal:
‘We now have an intense week of negotiations ahead of us in the run-up to the special European Council on Sunday.
During that time I expect us to hammer out the full and final details of the framework that will underpin our future relationship and I am confident that we can strike a deal at the council that I can take back to the House of Commons.’
Euro (EUR) to Pound Sterling (GBP) Exchange Rate Remains Volatile Over Italian Budget Uncertainty
Euro (EUR) exchange rates, meanwhile, still remain in a volatile situation over Italy’s refusal to review its budget, the Deputy Prime Minister of the Five Star Movement commenting today that he is ‘not worried’ about the EU’s infringement procedure.
Although Brexit concerns are helping the EUR/GBP retain much of last week’s gains, the Euro is pairing is being effected by speculation surrounding what action the EC will take against.
The Euro could fluctuate on Tuesday when the EC publishes feedback on Italy’s latest budget revisions.
GBP/EUR: Outlook Remains Focused on Brexit and Fears of No-Confidence Vote
The threat of a vote of no-confidence is still dampening investors’ confidence in Sterling. With May and Brexit remaining in focus in the week ahead, further volatility is likely.
Wednesday will also see the release of the Organisation for Economic Co-operation and Development (OECD) Economic Outlook. A pessimistic forecast for the Eurozone would be Euro-negative.
Overall, the GBP/EUR exchange rate is set to be affected more by political factors than economic ones this week, with focus remaining on the Brexit draft and any signs of May coming under fire from a vote of no-confidence.
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TAGS: Currency Predictions