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GBP/EUR News – Pound Strengthens as New Brexit Deal Agreed

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The GBP/EUR exchange rate maintained it upward trajectory this week as the UK and EU finally managed to hammer out a Brexit deal.

Markets Cheer Brexit Deal News

A flurry of Brexit headlines ensured GBP investors were kept busy again this week.

There’s been plenty of ups and downs in the Pound as a result, with markets reacting to each and every scrap of news emerging from Brussels.

This resulted in some weakness in Sterling through the first half of the week amidst reports that ‘significant’ work needed to be done in order to secure a deal.

The Pound was quick to bounce back in the mid-week however amidst rumours that a draft deal had been reached.

This paved the way for GBP/EUR to break through to €1.16 in the latter half of the week, when the UK and EU announced that a deal had been agreed on Thursday.

However the Pound was unable to stabilise at its best levels after it emerged that the Democratic Unionist Party refused to give its support for the deal, prompting fears that the deal will not make it through parliament.

The Euro has also taken some cues from Brexit this week, accelerating in broader trade as the UK and EU finalised a deal.

However the single currency also faced some hurdles as a result of some underwhelming Eurozone data, particularly with the bloc’s latest CPI figures as inflation fell to a new two-year low in September.

Brexit to Remain Key Catalyst

Unsurprisingly the direction of the Pound to Euro exchange rate last week will largely be dependent on the result of Saturday’s parliamentary vote.

Should MPs back the new Brexit deal then we can expect Sterling to move sharply higher, potentially even testing highs not seen since the EU referendum.

On the other hand a rejection of the deal could see the Pound relinquish much of the gains made over the past couple of weeks.

Meanwhile, EUR investors will have plenty of data to sink their teeth into next week, the highlight of which will be the European Central Bank’s (ECB) latest rate decision.

No policy changes are expected from the ECB this month, but markets are still likely to pay close attention to the language used by the bank for any hints that it may be plotting more easing in the future.

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.

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