Supreme Court ruling offers support to the pound: How has the ruling affected GBP/EUR rates?
The pound to euro exchange rate made some gains yesterday after the Supreme Court ruled PM Boris Johnson’s prorogation of Parliament was unlawful. During yesterday’s trading window the GBP/EUR rate reached a high of 1.1345 on the interbank exchange, close to a four month high for sterling. UK MP’s will return to work later today after the historic ruling. They are expected to return at 11.30am and PM Johnson is expected to be there as he returns from New York, most likely there will be a barrage of criticism from his political opponents.
Sterling exchange rates did spike as news broke of the Supreme Court’s decision yesterday, and at the time of writing the pound to euro exchange rate remains north of the 1.13 level. The pound has gained in value since the annual low of 1.06/1.07 hit last month as the markets consider the chances of a no-deal Brexit diminishing.
36 days to Brexit: What could happen next?
The next steps for Brexit now remain unclear, despite the next deadline date currently set to the 31st of October. He has attempted to force a general election, but he cannot do this without the support of the opposition. He also lacks a majority within Parliament and the new court ruling means he cannot suspend Parliament. Perhaps the best opportunity he has for pushing through Brexit next month is attempting to strike a deal with the EU which would allow him to ensure the UK leaves in time, although time is running out.
Economic data is very light for the remainder of the week, so politics is likely to continue to remain the key driver for sterling value. It’s expected that PM Johnson will receive a lot of criticism today, and there have been calls for him to step down although this is unlikely in my opinion.
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