In today’s Euro exchange forecast, we’ll see how, since Boris Johnson has taken office, the Pound has weakened almost -3% against the Euro.
This week we have seen the Pound at two-year lows against the Euro and USD, with market interbank rates hitting lows of 1.0888 (GBP/EUR) and 1.2164 (GBP/USD) respectively. Boris has taken a hard-line stance with regard to Brexit, stating that we will be leaving the EU on October 31st “come what may”.
Our new prime minister’s stance has weakened the Pound, as the likeliness of a no-deal Brexit has increased. A no-deal Brexit is generally thought, by most experts, to be a bad thing for the UK economy. Therefore, any hint towards this has the potential to weaken the Pound.
Recently, Mr. Johnson has been in talks with Ireland’s Taoiseach Leo Varadkar. Here, Boris made it clear that, if the UK is to leave with a deal, then the Irish backstop will need to be removed from the Brexit deal. However, Mr. Varadkar reiterated what the EU has been saying for a long time, namely that they will not change the Withdrawal Agreement. So, no progress has been made on this issue.
However, Boris Johnson will be putting pressure on the EU to reopen negotiations and continue to threaten a no-deal Brexit. This will affect both the UK and EU economies. It will be interesting to see what unfolds in the coming weeks and months.
Sell Euros update: Bank of England interest rate decision tomorrow
Tomorrow, we have Mark Carney of the Bank of England releasing the UK’s latest interest rate decision. Many experts are not expecting a change in interest rates.
However, Mark Carney will answer questions on how the UK economy is performing, plus his opinions on Brexit and its long-lasting effects on our economy. Historically, Mark Carney has weakened the Pound, as he usually takes a negative stance towards Brexit and the health of the UK economy.
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