In this Pound to Euro forecast, we’ll see how the GBP/EUR exchange rate has touched a 3-month high, presenting a better opportunity for those looking to buy Euros. The gains have been made despite the ongoing Brexit uncertainty, as the 31st October deadline approaches.
High volatility for GBP to EUR exchange rates is likely to be seen in the coming days. This is because a Supreme Court hearing will commence today, on whether the government’s decision to prorogue Parliament is lawful.
The case follows an English High Court ruling that the decision is lawful, and a Scottish ruling which deemed it unlawful. The outcome could have a profound impact on the price of Sterling, if the decision leads to more Brexit twists and turns. Rates for GBP/EUR are currently sitting at 1.1255.
Boris Johnson’s trip to Luxembourg
UK Prime Minister Boris Johnson was in Luxembourg on Monday for a meeting with EU Chief Brexit Negotiator Michel Barnier and European Commission President Jean-Claude Juncker. However, much of the attention moved to a small crowd of Brexit protesters standing outside, and the decision to go ahead with the press conference, but without the UK Prime Minister.
ECB introduces new wave of Quantitative Easing
The European Central Bank (ECB) recommenced its asset purchasing scheme, which has been dubbed Quantitative Easing 2. This reduces the deposit rate for banks holding funds with the ECB, to encourage them to lend. The ECB is trying to fend of a recession by injecting stimulus into the economy, to boost economic growth and raise inflation.
The sudden rise in the price of crude oil, the largest jump since the 1980s, could also have a negative impact on Euro exchange rates. The EU is already feeling the squeeze from the ongoing US/China trade war, and any further escalations in the Middle East could hinder global economic growth further.
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