Quarter one of 2019 is set to be an extremely volatile period for GBPEUR exchange rates as the Brexit negotiations for the time being have come to an end. MP’s within the UK are set to return to the House of Commons on the 7th January and will debate Theresa May’s Brexit plan and a meaningful vote, where MP’s will decide if the PMs plan is good enough, will take place the week after.
Only last night former Brexit secretary David Davis warned that the vote could be delayed once more as it’s likely Theresa May has not convinced Tory rebels to vote in her favour and this is why I believe the pound has continued to decline against the euro. If it’s the case she decides to delay the vote then I think they we will see a further sell off of sterling making euros more expensive to buy. However I don’t believe Theresa May has any interest of delaying the vote at this stage, as this could be the end of her as Prime Minister.
It’s more likely that the vote will take place and Conservative MPs will have to decide whether this deal is better than the alternative. The question is, what is the alternative? If the vote doesn’t get passed through Parliament, then I expect a motion of confidence against the government will follow from the opposition. All eyes will then turn to the DUP to see whether they will continue to support the Conservatives. If they do, then Theresa May is likely go back to Brussels and continue negotiating, wheres as if the DUP pull the plug, then I expect a general election will follow in the upcoming months.
The other likely options are for the UK to leave with no deal, another referendum or Theresa May to resign and another Conservative MP to take over and renegotiate.
In regards to exchange rates, I expect all scenarios except the vote being passed by Conservatives, will cause problems for the pound and purchasing euros will become more expensive. If you are purchasing euros short term, I would recommend getting in touch to outline your position but to also compare exchange rates. The company I work for has the ability to undercut other brokerages and high street banks. It takes 2 minutes to get in contact and with rates so poor every cent counts firstname.lastname@example.org.
If you are selling euros to buy pounds, exchagne rates are fantastic however I expect them to get better for a period. Again I would recommend outlining your position and I will keep you up to date with regular market information email@example.com.