In our latest Euro rate prediction, we’ll see how, following a surge at the end of last week, the Pound initially retreated in today’s trading. This is as the reality that a pathway towards a Brexit deal, as discussed by UK Prime Minister (PM) Boris Johnson and his Irish counterpart Leo Varadkar last Thursday, may not be easy to come by.
Despite a positive meeting between the two leaders, which continued with constructive talks between UK Brexit Minister Steve Barclay and the EU’s Chief Brexit Negotiator Michel Barnier, negotiators are already running into problems. Both the UK and EU have said they are keen to secure a deal but, with the clock running down, there is a sense that a deal cannot be achieved in time.
Market optimism has dampened and many now believe an extension is the most likely outcome, with a UK general election following shortly afterwards. The uncertainty has been reflected in the Pound’s trading, with a range of 1 percent between the high and low today.
When to buy Euros? UK and EU want deal this week
That said, both sides continue to state their desire for a deal, as we approach the EU Council Summit on Thursday 17th and Friday 18th. PM Johnson seems to have retained the support of the pro-Brexit European Research Group (ERG), although Northern Ireland’s Democratic Unionist Party (DUP) have highlighted that Northern Ireland must stay within the UK’s customs union.
The PM’s current proposals keep Northern Ireland in a customs union with the EU and in a customs union with the UK. Michel Barnier has already voiced his concerns about how this would work in practice, while Nigel Dodds, deputy leader of the DUP, has now cited this concern too. Elsewhere, Jacob Rees-Mogg, the Leader of the House of Commons, has claimed that EU law supersedes UK law and, as such, the government could use this to mitigate around opposition MPs’ Benn Act.
Buy Euros update: Eurozone economic data disappoints
In the Eurozone, economic data continued to disappoint this Monday 14th. Whilst Industrial Production rose 0.4 percent month-on-month, there was a -2.8 percent year-on-year fall, where analysts had expected a drop of -2.5 percent, its worst reading of the calendar year.
There’s no doubt that the Eurozone’s economy is flagging as the US/China trade war continues to play havoc with global growth. Germany, the powerhouse of the Eurozone, is grinding to a halt.
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