The Pound has seen a minor rise against the Euro on Monday afternoon, following signs of actual government drive in the Brexit process.
This has pushed the GBP/EUR exchange rate up, from an earlier 1.1325 to a slightly higher 1.1347.
For GBP traders, the simple fact that the government is properly meeting to discuss the next phase of talks has been enough to raise confidence in the Pound.
Brexit negotiations have previously been blighted with miscommunication and stalling among UK teams, but hopes are that both sides will crack on with talks in 2018.
(First published December 18th, 2017)
The Pound has lost ground to a stronger Euro today, but might see an upwards surge in the near-term after a key trade-based discussion.
Will UK Government’s Brexit Plans Trigger Pound to Euro Crash?
The Pound has dipped against the Euro on the opening of trade today, as the UK government meets to discuss its plans for future Brexit talks.
This session is taking place after EU leaders finally approved UK progress in Brexit talks last week, following a sudden rush of activity over the previous fortnight.
UK Prime Minister Theresa May is tipped to meet with senior ministers in her ‘Brexit cabinet’. The PM is expected to focus her attention on possible post-Brexit trade.
Just what kind of deal the PM aims for may affect the future value of the Pound.
UK banks are hoping for a deal that keeps the country closely tied to the EU, as revealed by a recent open letter from UK Finance.
This organisation, representing banks and financial institutions across the UK, believes that the UK needs to be ‘ambitious’ in its trading goals.
UK Finance has added that;
‘Pragmatic decisions to align the two regimes…should be seen not as concessions, but as mechanisms to maximise benefits within a deep regional capital market.
[If this path isn’t chose, there could be] an unnecessary loss [of GDP].
A high degree of mutual cross-border market access is fundamental to the continued success of our financial services sector.
[It is also key] to the success of the economies and citizens which our sector serves in the UK and the EU 27’.
If Theresa May does emerge from today’s meeting with an ‘ambitious’ trade agreement in mind, a GBP/EUR rate rise could take place.
Euro to Pound Rate could Rise Further on Higher Eurozone Inflation
The Euro has made minor gains against the Pound today and could see a significant improvement in the near-term.
Finalised Eurozone inflation figures are out shortly and expectations are for growth on the year.
If the base annualised inflation figure does increase from 1.4% to 1.5%, the Euro could appreciate.
Higher inflation would raise the pressure on the European Central Bank (ECB) to consider higher interest rates, thereby raising trader optimism.
That said, last week’s ECB event brought forecasts that Eurozone inflation won’t reach the ECB’s 2% target up to 2020.
If inflation is revised up against forecasts, there could be a surge in demand for the single currency.
Recent Interbank GBP EUR Exchange Rates
At the time of writing, the Pound to Euro (GBP EUR) exchange rate was trading at 1.1325 and the Euro to Pound (EUR GBP) exchange rate was trading at 0.8825.
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