GBP/EUR News – Pound Buoyed by Second Referendum Speculation

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Despite a crushing defeat for Theresa May’s Brexit deal, GBP/EUR climbed from €1.11 to €1.13 last week, amid growing speculation that the UK’s exit from the EU may now need to be delayed.

Sterling Climbs despite Rejection of Brexit Deal

The Pound to Euro exchange rate steadily advanced last week despite the overwhelming rejection of Theresa May’s Brexit deal on Tuesday.

While the rejection may have heightened the uncertainty surrounding Brexit, it was seen by many investors as diminishing the chances of a no-deal Brexit.

This allowed Sterling to climb through the second half of the week amid speculation Article 50 may be delayed and that a second referendum might be held.

Meanwhile the Euro continued to face headwinds last week amid growing evidence that the Eurozone slowed down at the end of 2018.

Adding to this pressure were comments from Mario Draghi, in which the European Central Bank (ECB) President suggested that recent economic developments in the Eurozone have been disappointing and indicated that further monetary stimulus would be needed in the face of global economic uncertainty.

Brexit Speculation to Continue to Dominate GBP/EUR Exchange Rate?

This week’s session is likely to see Brexit continue to act at the main catalyst for movement in the Pound to Euro exchange rate, with Sterling likely to remain highly sensitive to developments on this front.

With this in mind, a speech by Theresa May in Parliament on Monday may prompt some volatility in GBP exchange rates as she outlines the government’s next steps in creating a Brexit ‘Plan B’.

Also potentially impacting the Pound will be publication of the UK’s latest employment figures, with another solid wage growth reading potentially offering some support to the UK currency.

Meanwhile the Eurozone will publish its latest PMI figures in the second half of the week, this will provide EUR investors with their first look at how the bloc is faring in 2019 and may see the single currency stumble if growth remains muted.

This will be quickly followed by the ECB’s first rate decision of the year, which could drive significant losses in the Euro if policy makers appear to strike a more cautious tone than they did back in December.

If you’ve got a GBP/EUR currency transfer to arrange, the team at TorFX are on hand to help. Get started now to access bank-beating exchange rates and fast, free transfers.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
SPI disclaims any responsibility or liability related to your access to or use of any third party content.

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