Pound to Euro exchange rates have struggled to gain momentum this week after the seven Government resignations which were seen last week created so much political uncertainty in Britain.
Theresa May to meet with Jean Claude Juncker today
UK Prime Minister Theresa May will travel to Brussels today to meet with the President of the EU Commission Jean Claude Juncker to try and bring Brexit negotiations to a close ahead of the EU summit which starts 25th November. Any statements from leaders today and after the summit next week will likely continue to drive the Pound to Euro exchange rates.
Pound to Euro exchange rates still weak
Pound to Euro (GBP/EUR) exchange rates are still on a weaker footing with the threat of a confidence vote in the Prime Minister, which so far has failed to materialise. A number of letters of no confidence have been written to the 1922 Backbench Committee although the magic number of 48 to trigger a vote of confidence has not yet been reached. The looming threat is keeping the markets guessing and keeping sterling on shaky ground with Pound to Euro exchange rates sitting in the 1.12’s.
Bank of England Governor supportive of Brexit deal ahead of House of Commons vote
Meanwhile, the current Brexit plan has been supported by the Bank of England Governor Mark Carney which may play to the Government’s advantage in trying to win votes to back it in the House of Commons. The most important date in the calendar is the meaningful vote on the Brexit deal which will be held in the middle of December. This will be crunch time for the Prime Minister and will be the biggest test under her premiership. If she cannot command a majority in the House of Commons for this key vote then we are likely to see a leadership challenge which would almost certainly be negative for Pound to Euro exchange rates in the short term.
It is difficult to see how the arithmetic in the House of Commons will work for Theresa May when considering the hostile response that has been seen to this particular deal. The Democratic Unionist Party (DUP) have signalled they will not back the Government as have many other politicians on both sides of the Brexit debate. Of course Theresa May relies on the DUP to vote in line with Government to push through key parts of Government policy. For these reasons the next few weeks are unlikely to generate any major gains for the Pound ahead of this paramount debate and so risks for Pound to Euro exchange rates remain in these final stages of Brexit.
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