The pound has made some very positive gains towards the end of this week as it appears as though the Brexit situation is improving.
Reports emerged that a deal could be made regarding financial services for the UK after Brexit and this has helped the pound to hit 1.14 gainst the euro during this morning’s trading session.
Reports also suggested that Theresa May has agreed part of this potential deal, which would be seen as a huge positive step for the UK’s outlook after next March.
Brexit Secretary Dominic Raab has also published a letter which suggested that a deal may even be made by November 21st.
This recent bout of good news surrounding Brexit has certainly helped the pound make some very positive gains this week but are we in for another false dawn?
Over on the continent EU Chief Negotiator Michel Barnier has said that the reports are misleading whilst Downing Street has said that the story is ‘speculative’.
Meanwhile the Bank of England announced that they would be keeping interest rates on hold and BoE governor Mark Carney suggested that he expects the UK and European Union to come to a mutual agreement, which helped to boost pound sterling/ euro rates.
In previous meetings Mark Carney has been rather negative in his tone towards Brexit so this change of sentiment was another reason for the pound having a strong end to the week.
In my previous articles I have written that I think a deal will happen and once it does I expect GBP to claw back some of its gains, but the real problem for the outlook for the pound at the moment is that we are running out of time.
Indeed, if you’re waiting for an almighty boost to the pound, even if the deal gets done in the next few weeks, the UK will have to have it ratified in Parliament and this could be a big problem.
Therefore, if you’re buying euros in the short term, taking advantage of the current spike could be beneficial in the long run. For further insight into the potential ramifications of a Brexit deal or no deal scenario on the GBP/EUR pairing, complete the form below and I’ll be happy to get in touch to discuss your requirements.