GBP under pressure as Brexit progress stalls

GBPEUR Bounces on the Day with Limited Data Due

Pound to euro rates seem to have settled around the current level, with today’s range of 1.1328-1.1344 indicative of the stagnation we’ve seen on the pair of late.

Pound loses value against the euro after an eventful weekend

The pound saw its value dip following events over the weekend, with the ensuing fallout from the European election results likely to dominate headlines over the coming days.

The markets may have already factored in UK Prime Minister Theresa May’s announcement of her resignation timeline on Friday, but the decimation for the UK’s two main political parties in the European elections, is unlikely to have been fully factored into the current market value on GBP/EUR.

Pound to euro forecast

In truth, the pound has been fairly resilient throughout these major political events, holding its value against the euro with only a small sell-off following the final votes being counted over the weekend. Whether this trend continues is now the key question for investors, but recent history indicates GBP should continue to find a level of support around the current levels.

The markets have remained range-bound over a prolonged period with the pound finding plenty of support around the 1.13 level but has failed to make any significant and more importantly sustainable inroads above 1.15, since the breakdown in cross-party Brexit talks.

British politics weigh on pound to euro rate

With the Conservatives party having to enter a leadership contest and Brexit talks once again at an impasse, the uncertainty which has engulfed the UK economy and restricted the pound, is likely to continue in the foreseeable future.

Talk of another general election and even a possible second referendum add another facet to proceedings, so clients hoping for a return to the recent highs of 1.16/1.17 against the EUR may be left disappointed, unless of course there is a major shift in market conditions.

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