The pound to euro exchange rate has fallen by around -0.45% in the last day, to 1.11 today, close to a one-month low. In part, this is because the UK’s and EU’s Brexit talks have seemingly come to a halt.
However, UK Prime Minister (PM) Boris Johnson is scheduled to meet his Irish counterpart, Taoiseach (PM) Leo Varadkar in Dublin today, to try and unlock the talks.
In addition, Germany’s exports fell in August, according to official statistics today, further lifting the odds that the Eurozone’s largest economy has entered recession. This factor could affect sterling versus the euro.
No more Brexit talks scheduled: Merkel hardens EU position
The Guardian newspaper reports that the UK and EU currently have no more Brexit talks scheduled. This follows a period in which the two sides met almost daily.
It’s thought that the UK and EU are talking less frequently, following news on Tuesday that German Chancellor Angela Merkel thinks that Northern Ireland will have to stay in the EU’s Customs Union “forever”.
This would be unacceptable to any UK government, since it would mean constitutionally dividing Northern Ireland from the rest of the UK. The EU is yet to officially confirm or deny these reports, but since then, Brexit progress has slowed.
UK PM Johnson to meet Ireland’s Varadkar in Dublin for talks today, expect volatility for GBP/EUR rates
However, UK PM Johnson and Ireland’s Taoiseach Varadkar will meet in Dublin today, to try and unblock the talks. The two men will have to make quick progress, to reach a Brexit deal before the important EU summit next Thursday 17th.
The EU has insisted that they won’t hold any last-minute talks with the UK about Brexit at the summit, but in the past, Brussels has made deals at the very last moment. So, news from today’s meeting in Dublin may be worth keeping an eye on as pound to euro exchange rates may fluctuate as news emerges from this meeting.
Germany’s exports fall in August, raising odds that Germany in technical recession
Elsewhere, Germany’s exports fell by -1.7% in August month-on-month, according to Statistiches Bundesamt Deutschland today. This was the sharpest decline in Germany’s international sales since April, and suggests that both Brexit, plus the USA’s and China’s trade war, continues to weigh.
It’s thought increasingly likely that Germany will enter a technical recession in Q3, between July and September, having shrunk by -0.1% last quarter.
If you have an upcoming currency transfer and would like to learn more about the factors affecting GBP/EUR exchange rates, feel free to contact me directly using the form below.