In today’s Pound to Euro forecast we look at the outlook for GBP/EUR exchange rates during the week ahead. The Pound has started the week on the front foot against the Euro, finding plenty of support above 1.15.
With further gains this morning pushing the Pound to Euro rate up to a high 1.1591, investors will now be asking themselves whether this positive trend is set to continue over the coming days.
Pound to Euro forecast: Brexit talks key to Pound value
Today’s meeting between UK Prime Minister Theresa May and the EU’s chief negotiator Michel Barnier, could hold the key to any further improvement for the Pound this week.
Their much anticipated meeting will be monitored closely by the markets, as the two key figureheads try to find common ground over the Irish backstop agreement. This seems to be the final major sticking point between UK MPs voting through a Brexit deal or not, ahead of next month’s impending deadline. With March 29th fast approaching, the two will be under pressure to find a resolution or they face being left in the unenviable position of having to agree upon an extension to Article 50, or even worse having to accept that the UK leaves the EU without a deal being in place.
The threat of a no-deal has been enough to restrict any major upturn for the Pound in recent months, whilst it has also helped to protect the Euro from any heavy losses, despite growing concerns surrounding the Eurozone economy.
If Theresa May manages to somehow push through any revised Brexit deal, then I anticipate the EUR/GBP rate to dip sharply, with the markets now likely factoring in the chances of Article 50 being extended.
Barnier has already highlighted how fraught the negotiations are likely to be in the final stages, which indicates that we are set for increased volatility for the Pound to Euro forecast.
If Euro sellers in particular are holding off on selling their currency positions around the current levels, then I can only imagine that they are pinning most of their hopes on a no-deal Brexit, a scenario I feel is required if we are to see the single currency return towards its post referendum highs.
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