In this article about when to buy Euros, we’ll see how the new date allotted by the European Union for Brexit is January 31, 2020. The President of the European Council, Donald Tusk, announced on Monday that the Brexit extension requested by the UK has been approved.
According to the ‘flextension’, the UK reserves its right to depart from the EU earlier, say December 1 or even January 1. This approval is guaranteed if the British Parliament can work out a new Brexit deal, and take a finalised decision regarding the fate of Brexit.
Present British Prime Minister Boris Johnson vehemently wanted to proceed with Brexit by the end of October. But now, the government has accepted the delay offer. Mr. Johnson was forced to accept this delay, since the Benn Act which obliged him to request an extension also dictated that he must accept a further delay, if offered.
This has created an anti-climactic situation. It can be seen clearly that the EU wishes to avoid the uncertainty that would follow its acceptance of a no-deal Brexit. With the economic and trade disruption it would cause, it seems like a safe pathway to opt for a delay to think things through. It was more a matter of how long.
Euro predictions: How could these potential outcomes impact the Euro?
As is the case, the Pound will be heavily impacted by developments revolving around Brexit. It is expected to show volatility and, incidentally, the Euro has emulated the behaviour of the British currency, albeit to a less extreme extent.
The knock-on impact of Brexit has the potential to touch a wide range of sectors throughout Europe. A no-deal Brexit would throw these nations into economic uncertainty and risk, whereas a Brexit deal would certainly curb risk and uncertainty.
For instance, Germany, currently the biggest European economy, is sitting on the edge of a recession. As a major exporting nation, its factory orders have sharply declined, with the looming Brexit on the political horizon.
The job sector in the Netherlands, Belgium, France and Germany could be potentially affected if a no-deal Brexit is signed, which would bring trade to a near-standstill.
This is likely to bring the European Central Bank into play, as it will attempt to stabilize the economic downturn by further easing monetary policy. The dovish trend could then sink the Euro further. Therefore, Euro forecasts don’t paint a favourable picture in this scenario.
For more information on how these factors are likely to impact the GBP/EUR interbank exchange rate in the coming weeks, you can contact me directly, Joseph Wright, on email@example.com. I will endeavour to get back to you as soon as I can.