Including today, it is now just 25 days to the 31st October and the set date the UK will leave the European Union. What are the key dates and what can we expect for GBP/EUR exchange rates?
Sterling finds favour from expectations of an extension
The pound to euro exchange rate has improved from the interbank lows of 1.0647 on the 10th August, when no-deal looked likely. The interbank rate has climbed and is now trading at 1.1220 at the time of writing. Sterling has found favour as there is expectation of an extension, removing the more immediate threat of no-deal which we know has generally seen the pound suffer. Concerns that the UK economy will suffer in the no-deal scenario, underpinning sterling weakness from this prospect.
Pound to Euro exchange rate driven by Brexit developments ahead of EU summit
Boris Johnson will face a challenging time to get support for the Brexit deal revision he has proposed, from the EU and importantly Ireland. Next week, is the crucial EU Summit on the 17th and 18th October, where Boris Johnson will attempt to finalise a deal or perhaps request an extension.
The pound to euro rate may well continue to be driven by Brexit developments ahead as these crunch talks and decisions await, here are some of the key dates ahead for the rest of this month (as taken from today’s Times newspaper).
Tuesday October 8th – The last date of parliamentary business, ahead of the proroguing of parliament for the Queen’s Speech next week. This means there is only today and tomorrow for any last minute parliamentary wranglings to change course.
Friday 11th October – The EU deadline for Boris Johnson to make his new plan acceptable for European leaders, in order for them to discuss it ahead of the EU Summit on the 17th / 18th next week.
Monday 14th October – Date set for Queen’s speech. The Times warn this might be cancelled as it may simply end up being an election manifesto for the Government.
Thursday 17th and Friday 18th October – EU Summit – Will Boris’ deal get approval or will EU leaders reject the plans and an extension become more likely? GBP/EUR rates may be sensitive around this summit which markets have had their eye on for some time.
Saturday 19th October – Date set by the ‘Benn Act’ by which the UK Prime Minister must ask for an extension. The outcome of this might trigger many other scenarios including a Supreme Court case if PM Johnson refuses.
Monday October 21st and Tuesday 22nd October – Vote on the Queen’s speech. If the Government lose, a vote of no-confidence may well be called which may also see increased volatility on GBP/EUR exchange rates.
The Times reports if an extension is agreed by this 21st and 22nd date, then a date for an election may well be tabled in ‘late November or early December‘.
Pound to euro forecast: What could happen to GBP/EUR rates?
Pound to euro exchange rates have ranged between 1.0647 and 1.1763 in 2019 on the interbank level, current rates of 1.1220 sit with the potential for the rate to still both rise and fall as we await further news on which direction Brexit will take.
No-deal is still not completely out of the question, with The Sunday Times’ David Smith quoting JP Morgan yesterday, who see a 10% probability of no-deal on October 31st. Bloomberg were quoting research by Morgan Stanley last week indicating a 5% chance of no-deal.
The next few weeks may see increased volatility on GBP/EUR levels which may influence the cost of sending or receiving money from overseas. On amounts of a few thousand up to the multi-millions, our service is designed to monitor market developments and offer different strategies to help with the planning and execution of your currency exchange.
Thank you for reading and please contact us using the form below to learn more about how these unfolding events may shape your exchange rate ahead.