Pound to Euro exchange rate spikes on positive Brexit news
The pound to euro exchange rate has recovered with decent gains for the GBP vs EUR pair as Brexit continues to dominate the headlines this week. Rates for GBP/EUR have broken over 1.13 this morning. UK Prime Minister Boris Johnson met with Irish Taoiseach Leo Varadkar yesterday in a bid to try and find compromise over the contentious Irish backstop. The joint statement signalled no further progress has been made but “they agreed that they could see a pathway to a possible deal.” The pound rallied on the news in the hope that a deal can be reached by 31st October, the existing deadline by when the UK will leave the EU. The market movement highlights how the pound continues to pivot on the prospect of either a deal happening or no deal Brexit.
Morgan Stanley Capital international were quoted in the Financial Times yesterday suggesting the pound could lose 10% on the back of a no deal but that it could gain 8% if a breakthrough is found. Those with pending currency requirements looking to either buy or sell euros would be wise to plan around all these latest Brexit developments. Depending on events in these coming days and weeks the pound could see major market movement in either direction.
Today the Brexit Secretary Stephen Barclay will meet with the EU chief negotiator Michel Barnier. Any detail offered as to what a deal may look like could trigger further volatility for pound to euro exchange rates. Michel Barnier will also be meeting with Leo Varadkar which highlights how crucial today could be in terms of paving the way forward with a potential Brexit.
UK economy to avoid a technical recession
UK Gross Domestic Product data yesterday saw a fall in August of 0.1%. However, there were revisions upwards for the start of the quarter which would suggest that Britain will avoid falling into a technical recession.
UK data is light today which means focus will largely be placed on the ongoing Brexit talks. In the EU similarly there are no major economic data releases. The minutes from the last European Central Bank meeting were released yesterday and it is clear that there are differing views on the reinstatement of quantitative easing making the direction of policy under Christine Lagarde less clear.
If you require more information on GBP/EUR rates or have an upcoming currency transfer, feel free to contact myself directly using the form below.