In today’s Pound to Euro forecast we look at why the GBP/EUR rate has been in the ascendancy over the last couple of weeks. Investors seem to have become more confident over the future outlook on Brexit. Expectations for Brexit are continuing to be shaped by political developments in the UK and abroad. The pound is likely to remain under pressure despite having risen quite dramatically lately.
More MPs expected to defect from Labour
A key factor for us to consider overnight has been the news that an increasing number of Labour MPs are looking to defect if Corbyn will not support a second Referendum in the weeks ahead. This could see increasing support for the Independence Group which is in favour of a second Referendum on Brexit.
Pound to Euro Forecast: Pound could lose value due to uncertainty
The pound might lose value in the ensuing uncertainty, as investors await a potentially increasingly uncertain situation. The expectation for results on a second Brexit vote are unclear, it is highly possible Leave would win once again. According to a You Gov poll, quoted in the Economist, over 90% of Leave votes (in a survey of 90,000 participants), would still vote Leave.
The margin of losses for Remain last time were so fractional as to make it very worrying over which direction to expect a second Brexit vote would take. The Pound to Euro rate is buoyant on the chances of a no-deal Brexit having reduced, fresh weakness on the Euro as Trump talks up European trade tariffs has aided the move on GBP/EUR.
Overall, I expect the Pound to Euro rate will continue to remain choppy in March and there is still a very large chance it will dip back to retest the 1.10 levels. The 7th March and 21st March are key dates with the former the ECB, European Central Bank decision, and the latter, the Bank of England meeting.
Pound to Euro rates are far from out of the woods and both buyers and sellers will have plenty to discuss in the weeks ahead as we await final news on Brexit.
Next week is the meaningful vote from Parliament, this could see lots of volatility on the pairing, the vote looks likely to be defeated which will open up lots of possibilities on Brexit and also GBP/EUR rates.
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