Sterling has lost further ground against its Euro counterpart this week, with the markets gearing up for next week’s key Brexit vote.
There was another twist to the on-going saga yesterday, as UK Prime Minister Theresa May suffered fresh humiliation in the House of Commons. With the PM fighting to push through her Brexit deal in the same venue next week, she took yet another hit as the Government lost a second dramatic Parliamentary showdown in as many days.
Should the PM’s Brexit deal be rejected by MPs next week, as many expect it to be, then her room for manoeuvre and window to turn around the rejection of support has been decreased dramatically.
She now has only three working days to come up with a plan B, a result which caused an outcry and furious scenes inside the House of Commons, a venue which could ultimately seal Theresa May’s fate next Tuesday, should she lose what is becoming the most critical phase of Brexit talks so far.
Pound to Euro forecast: What’s next for GBP/EUR?
The Pound has suffered once again as a result of this uncertainty, dropping to 1.1045 against the Euro at this morning’s low. Looking ahead, if next week’s vote does not go favourably for the PM then I anticipate the Pound to Euro rate to fall further, with the 1.10 resistance level likely to come under serious threat.
However, I do feel that a negative result for the PM has been at least partially factored in to the current value of Pound to Euro rates, so any positive result could see an surge in support for GBP, which I would expect to make a run towards 1.15 at least should she gain the necessary support to push through her Brexit proposal.
Looking at the Eurozone economy and this is also starting to show signs of weakness, which could put pressure on the EUR as we move through the first quarter of 2019.
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