The pound to Euro exchange rate has slipped slower after an excellent rally for the GBP vs EUR pair over these last two weeks. The pound is close to the highest levels seen in this recent trading range which is still presenting those looking to buy Euros with a good opportunity to purchase.
The markets are now awaiting confirmation from the European Union as to whether it will grant Britain the extension that the Prime Minister was forced to request via the Benn Act.
The newly renegotiated withdrawal agreement has found support across the House of Commons marking a milestone although there are concerns over the time made available to scrutinise the agreement. The EU may offer an extension until 31st January as per the letter although there are talks this morning of a much shorter extension. The detail of these events could shift the price in either direction and clients looking to buy or sell Euros would be wise to plan around all these latest developments. There could be a big movement at any time when clarity if offered on whether or not there will be an extension and the terms attached.
Will the Government call for a general election
The outlook is now far from clear and there are growing calls by the government for an election, something the Labour party is reluctant to agree to. At some point however an election will need to come as the government no longer holds a majority and is currently unable to govern. The outcome of that election is likely to carry huge implications for the pound vs Euro exchange rate. There could be major market volatility for the pair
ECB expected to make interest rate decision later today
ECB President Mario Draghi will complete his term today at his final governing council before he hands over the reigns to Christine Lagarde later this month. The interest rate announcement expected at 12:45 could result in volatility for the Euro today although it remains to be seen whether he will rock the boat so close to handover to Christine Lagarde. The German economy has come under the spotlight in recent months and todays data has shown German companies are now cutting jobs with employment falling. This is the fist time this has happened in 6 years indicating the pressures the engine room of the economy is feeling.
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