Sterling volatile going into October as key Brexit dates loom
The pound to euro exchange rate has been flirting with the 1.13 levels during the last week or so but failing to make headway past the level of resistance. With now less than a month to go before the UK is due to leave the European Union, we could be in for one of the most volatile months in recent history for the currency pair. Concerns are growing that the UK could face a no-deal Brexit and with the next EU summit due on 17th October time is quickly running out.
Boris Johnson to submit finalised Brexit deal within the next few days
According to the latest reports, the British government is finalising the legal text of an updated Brexit deal. Over the next few days the plans will be made more public, but the Irish Deputy Prime Minister has already claimed that the plans were a ‘non-starter’. Boris Johnson has remained committed to leaving the European Union by the end of this month even if a deal has not been concluded with Brussels.
However, MPs have already voted on the Benn Act which means that if he cannot agree a deal in Parliament, he will have to ask for an extension on or before 19th October. The real issue is that whatever the deal the UK comes up with the EU will have to agree with the terms. As yet, the EU are still yet to agree the terms of the current deal. With the previous deal proposed by Theresa May having been voted against three times the current deal appears to have little difference.
The Irish border remains one of the key sticking points even though talks continue between the UK and the European Union. According to Liberal Democrat Jo Swinson she has claimed about Johnson’s deal that ‘he knows that this is going to be rejected.’ Possibly the most important date will be 19th October as we should know by then whether or not Brexit may be concluded by the end of this month. Expect volatility for pound to euro exchange rates heading up to this date as news emerges from the EU giving indications on whether the UK is headed for a deal or no-deal.
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