The Pound is trading in negative territory against the board of major currency pairs this morning, with GBP/EUR dropping into the 1.10s at the time of writing. The pair have been range bound for a while now, mostly trading between 1.1050 and 1.1200, although there are plenty of key dates this month that could push the pair out of this trading range.
Brexit uncertainties are likely to remain an issue for Sterling until at least the middle of this month. MPs will return from their Christmas break on the 7th of this month and then on the 14th there will be the vote on Theresa May’s Brexit deal. This vote was delayed early last month after she felt that there could be a dramatic loss on the cards. This vote is likely to be followed closely and if you’re planning on making a currency exchange involving the Pound or Euro then this date should be followed closely and planned around.
A week later, on the 21st there could also be market volatility as this date is the final date the Government has to release its withdrawal plans. If it hasn’t happened by then MPs will gain influence on the PM’s next steps. The outcome of the vote one week prior to this date is likely to tie into this deadline.
GBP/EUR rates: Brexit related updates to remain the key driver
The Brexit is planned to take place on the 29th of March and by this date Parliament must have passed the EU Withdrawal Bill which at the moment is looking like a difficult task. I’m expecting Brexit related updates to remain the key driver although there will be PMI Construction figures released at 9.30am tomorrow and then Services PMI figures released at the same time on Friday.
There could be movement for GBP/EUR brought on by Euro price changes later in the week when Consumer Price Index figures will be released, covering Inflation levels throughout the Eurozone. A positive for the Euro has been the agreement between the Italian Government and the EU regarding its domestic spending allowances but I think this strain on the relationship could resurface in the future. Another potential downside for the Euro’s value is the impact to the French economy the recent protests have caused.
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