Pound to Euro rates stuck under 1.12 as investors wait for substantial news on Brexit

Pound to Euro rates stuck under 1.12 as investors wait for substantial news on Brexit

Recession and Bank of England interest rate fears

The pound to euro exchange rate has been rangebound, operating in a fairly narrow band, as the market awaits some more concrete news regarding the latest outlook on Brexit. Brexit remains the main source of discussion for the pound although other factors have captured headlines too in recent weeks, including the prospect of the Bank of England cutting interest rates, and also whether the UK is headed for recession.

Welcome rates for Euro sellers

This is great news for euro sellers for pounds, as the general position puts them very close to some of the best levels we have had all year to sell euros for pounds. At the bottom and best point for selling euros for pounds this year, the interbank rate would have been 1.10 so euro sellers are doing well. Much of the negativity does seem to be priced into sterling, and there has been little change in the levels, GBP/EUR rates have only moved 0.55% in the last week, oscillating between a range of 1.1104 and 1.1166 on the interbank exchange rate.

Pound to Euro forecast: What will spark movement for the GBP/EUR pair?

The lack of movement is due to the lack of new information being available to provide the market with direction. I have read many reports in recent weeks, including in the FT and the Economist publications, which highlight how sterling has been ‘untradeable’, as investors await something substantial on Brexit.

Looking ahead, it might be that even a new UK Prime Minister fails to be the spark, which ignites something more substantial. Whilst a new PM does of course offer some prospect of change on the rates, it is impossible to say now what this will be. What we can say, is that the prospect of a no-deal Brexit, has seen sterling lower in recent weeks and I would expect this weight and sentiment will continue up ahead.

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