The pound to euro rate has fallen lower as we have moved into 2019 with rates for the GBP to EUR pair having fallen to below 1.1050. A mini flash crash was seen in overnight trading with a sudden but short lived fall in the pound which has been attributed to low liquidity conditions at this time of year and at this time of night when many of the exchange markets were shut whilst Japan is enjoying a four day holiday. The crash also appears to stem from a poor set of forecasts for Apple Inc’s revenue which saw substantial losses in its share value, which in turn is having a knock on effect on the currency markets with GBP to EUR trading lower.
Pound to Euro rate: Concerns as 2019 begins
2019 starts the year with a number of major concerns over Brexit as well as the continued uncertainty over the US trade wars. There are real concerns for the Chinese economy and this impacts on the global economy too. With the prospect of the US applying further trade tariffs on all of China’s exports then there is likely to be more reaction for the pound and euro to any developments here.
Brexit meanwhile is already proving to be the main driver for the pound and this is expected to intensify in these coming weeks after Parliament returns from the Christmas recess on the 7th of January. The Parliamentary vote that was to be held before Christmas is now scheduled to be voted on before 21st January, with the 14th January a likely date.
Debating of the Brexit deal that has been agreed between the UK and EU will commence on the 9th of January. It has already been reported that one of the former Brexit secretary’s David Davis, has said that there is not enough support for the deal at this point in time and is urging that the vote be delayed again. The continued uncertainty over whether or not there will be a Brexit deal is keeping the pound on the back foot and there is every chance the pound may fall further in the run up to this important Parliamentary vote.
If Prime Minister Theresa May is unable to secure a majority in the House of Commons then the default option on Brexit is to revert to a no deal and this outcome is proving to be a distinct possibility which carries negative risk for the pound to euro rate.
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