The Pound traded in a wide range against the Euro this week, but was still able to close the week notably higher as the outcome of a series of Brexit votes bolstered hopes of a softer outcome for Brexit.
Pound Soars as Parliament Rejects No-Deal Brexit
Trade in the Pound was erratic this week, with Sterling experiencing some wild swings in movement in response to a series of Parliamentary Brexit votes.
The initial swing came at the start of the week, with the Pound briefly soaring as Theresa May secured concessions on the Irish backstop, before quickly falling back to earth after the changes failed to convince MPs and saw them reject the PM’s withdrawal deal on Tuesday.
GBP/EUR didn’t stay in the doldrums for long however, roaring back to life almost immediately on Wednesday and briefly striking a new 21-month high as MPs ruled out a no-deal Brexit, with Sterling then stabilising in the second half of the week in a subsequent vote in which Parliament backed a delay to Brexit.
Meanwhile the Euro found itself playing second fiddle to the Pound for much of the week, with the only notable data release coming at the start of the session as a shock contraction in German industrial production at the start of 2019 renewed fears a slowdown in Europe’s largest economy.
More Volatility Ahead as May to Push for Third Vote on Deal
It’s a case of another week, another Brexit vote next week as Theresa May embarks on a third attempt to get her Brexit deal through parliament, ahead of the upcoming EU Summit on 20 March.
This is likely to result in further volatility in the Pound through the session as the outcome of the vote will likely determine the length of the Brexit delay.
Also in the spotlight next week will be the Bank of England’s (BoE) latest policy meeting, with investors eager to hear the bank’s current take on Brexit and how a delay may impact a future rate hike.
Meanwhile the focus for EUR investors next week will be on the Eurozone’s latest PMI figures, with the appeal of the Euro likely to be dampened if growth in the bloc’s private sector is shown to have remained weak through March.