Pound to Euro rate breaks out above 1.13, hitting a 3 month high in the process

Pound to Euro rate breaks out above 1.13, hitting a 3 month high in the process

What is driving the Pound to Euro exchange rate?

Late yesterday evening and this morning the Pound to Euro exchange rate has breached 1.1300, and this is the first time the Pound has traded this high against the Euro since back in early June.

The markets perception is that the chances of a no-deal Brexit are fading, and this is perhaps why we’ve seen the Pound climb gradually in recent weeks, not just against the Euro but against other major currency pairs also.

Bank of England expected to leave rates on hold

This afternoon the Bank of England will be announcing their most recent interest rate decision although no changes are expected. With the Brexit deadline now just over 40 days away it would be unusual for the BoE to make any drastic changes, and interestingly there is no expectations for a speech after the vote from BoE governor Mark Carney as per usual after the decision.

Mark Carney has outlined increased risks to the UK economy recently owing to the chances of the no-deal Brexit taking place, and there have been a high number of bets from market participants on interest rate cuts in future should a no-deal Brexit take place.

Sterling exchange rates have been influenced recently by the Supreme Court’s Brexit related hearings, and whether or not to decision to prorogue Parliament is legal or not. This matter is also worth following in case it results in movement for the GBP/EUR rate and do feel free to register your interest with us if you wish to be kept updated.