Pound close to 18 month highs against the Euro but Brexit continues to dominate exchange rates

Pound close to 18 month highs against the Euro but Brexit continues to dominate exchange rates

It has been a very interesting start to the year so far with the Pound making some gains vs the Euro, hitting its highest level last week since May 2017. However, the Pound has not been able to hold on to these gains as the countdown towards when the UK is due to leave the European Union gets closer and closer.

Brexit deadline gets closer and closer

We are just over 7 weeks away from the deadline and at the moment things are far from sorted in terms of the Brexit deal between the UK and the European Union.

Prime Minister Theresa May will be due to visit Brussels once again this week in an attempt to redraft the current plan, with the Irish backstop issue top of her agenda.

Last week, with the Brady amendment MPs voted in favour of a change to the current set up, so Theresa May will face a difficult time this week persuading European leaders to back down from their current deal as they have previously said on a number of occasions that they are not prepared to renegotiate.

A new proposal put forward by Kit Malthouse has suggested that a ‘Plan C’ could involve introducing technology to replace the Irish backstop with a new free trade agreement and technology on the border as well as having an extension to the current timescale.

Bank of England interest rate decision

The next piece of crucial economic data due out for the UK will be Thursday’s Bank of England interest rate decision due to be released on Thursday afternoon.

The UK’s economy has been doing rather well lately with UK employment now at the best level in over 30 years, so clearly there is room for the Bank of England to consider an interest rate hike, but whilst we are in the midst of arguably the final part of Brexit I cannot see the central bank doing anything for the time being.

If you have a currency transfer to make involving Euros and would like to save money on exchange rates compared to using your own bank then contact me directly for a free quote. I look forward to hearing from you.