GBP/EUR News – Pound Rocked by Renewed Brexit Uncertainty

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Brexit headlines continue to dominate GBP/EUR exchange rate, infusing volatility into the pairing as the news flow turned negative.

Brexit Setbacks Sour Sterling Sentiment

Brexit continued act as the main catalyst behind the Pound this week, with a series of setbacks for Boris Johnson damaging GBP exchange rates.

The key development this week was Johnson’s failure to secure support for this Brexit deal.

This ended with Sterling slumping as the PM ‘paused’ his Withdrawal Agreement Bill after MP’s rejected attempts to fast-track it through parliament on Tuesday.

While Sterling made attempts to claw back some of its losses in the mid-week, this was quickly undermined on Thursday as Johnson announced his intension to push for a general election before Christmas.

However this would be dependent on another Brexit extension, which at the time of writing the EU had still not formally responded to.

The Euro also took some cues from Brexit this week, weakening in wider trade amidst fears a hard-won deal could still slip through the fingers of everyone involved.

Meanwhile the big event of the week proved to be a bit of a non-starter, with the European Central Bank (ECB) leaving its monetary policy unchanged and markets focusing interest on the legacy of President Mario Draghi as he bowed out after 8 years at the helm of the bank.

Will Boris Johnson Get His Election?

Looking ahead, we expect the Pound to Euro exchange rate to remain volatile next week as Boris Johnson is set to bring a motion before parliament calling for a snap election.

Under the Fixed Term Parliaments act, Johnson will need the support of two thirds of MPs, so an election is by no means a certainty.

All the same we can expect trade in Sterling to remain erratic amidst heighted political and Brexit uncertainty.

Meanwhile in focus for EUR investors next week will be the Eurozone’s latest GDP reading

Expect the Euro to face some headwinds if growth slowed in the third quarter as forecast.

Also demanding attention will be the Eurozone’s consumer price index. Could we see another weak inflation reading put more pressure on the ECB ease its monetary policy and further weaken the single currency?

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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