The Pound to Euro exchange rate has remained in a fairly tight range, trading above 1.16 for most of this week so far, apart from a brief flirtation back into the 1.15s.
It appears as though the currency markets are adopting a wait-and-see approach before next week’s ‘meaningful vote’ in the House of Commons. Clearly, there appears to be a lot of support for the Pound at the moment, so next week’s vote will be crucial in determining the next stage with Brexit.
Politicians are still working behind the scenes to try and sort out a deal and, in particular, looking specifically at the Irish backstop arrangement. This has not sat well with politicians so far.
If the vote fails to go through on 12th March, the following day the House of Commons will be asked to vote on leaving the European Union without a deal. I think Theresa May will lose the first vote and the second vote will result in MPs rejecting a ‘no deal’ Brexit.
A third vote will then take place on 14th March. This will involve MPs voting on whether or not the Prime Minister should seek an extension to Article 50, to prolong the process past the current leave date of 29th March.
The potential extension could involve the UK asking the European Council for an extension until no later than the end of June. That is when MEP elections are due to take place.
Euro could weaken later today following ECB announcement
Later today, the European Central Bank will be announcing their latest monetary policy decision. At the moment there appears to be no appetite for changing interest rates any time soon. If ECB president Mario Draghi adopts a more dovish tone, and if the ECB suggest that they will be keeping interest rates on hold for the foreseeable future, then this could see the Euro weaken later today.
In the next few weeks we could see a huge amount of volatility, but I think we could see some gains for the Pound against the Euro, breaking past last week’s 18-month high. So, if you’re looking at buying Euros and would like further information or a free quote, then contact me directly and I look forward to hearing from you.
Tom Holian firstname.lastname@example.org