The Pound has staged a minor comeback this morning, as it has hit 1.1607 at its highest level. This is after a sell-off of the Pound’s value yesterday, that saw the GBP/EUR rate drop into the 1.14s for the first time in almost a month.
Late last night, European Council President Donald Tusk announced that all 27 European Union leaders have agreed to extend Article 50, as requested by UK Prime Minister Theresa May.
However, the length of the extension will depend on whether or not MPs vote in favour of May’s Brexit deal. So, despite the chances of a no-deal Brexit decreasing, there is still plenty of uncertainty. This is likely to impact the Pound’s value, moving forward.
As it stands, if MPs vote in favour of May’s deal, the extension will run from March 29th until May 22nd. If May’s deal is rejected for a third time, the extension to Article 50 will only run until April 12th. This will leave MPs with the choice of a no-deal Brexit or a much longer extension.
The latter could perhaps be favoured by the markets. This is because, although they generally dislike Brexit and uncertainty, I think that the longer option would perhaps include another referendum on the matter.
Up until now, the EU leaders have made it clear that they favour another referendum and also avoiding a no-deal departure. I think that, if another referendum is announced, we will see the Pound jump in value.
Pound to Euro forecast next week
Next week could be busy for the GBP/EUR exchange rate. Market volatility has increased in the lead up to March 29th, owing to the uncertainty of the situation. If you wish to be notified if there are major market movements, do feel free to register your interest.
If you have a large currency exchange to carry out in the coming days, weeks or months, then you are more than welcome to speak with me directly. I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you buy your currency.
A small improvement in a rate of exchange can make a huge difference. So for the sake of taking two minutes to email me, you may find you save yourself hundreds if not thousands of Pounds. You can email me, Joseph Wright, on firstname.lastname@example.org and I will endeavour to get back to you as soon as I can.