GBP EUR Falls Lower as Brexit Discussions Resume

The pound has fallen further today against the Euro with rates falling to a low of 1.1219 before picking up some lost ground in afternoon trade.
The driver for the weakness in the pound is largely as a result of Brexit uncertainty and this week holds a number of important government cabinet meetings which could provide more clues as to where Brexit is heading.

The Brexit negotiations which have resumed this week haven’t started on a particularly optimistic outlook with question marks surrounding the single market and whether or not Britain will have access to it. The other sizeable issue of course is whether UK financial services will be included in any deal and considering services represents 80% of the British economy.

We are likely to see a lot of volatility for GBP EUR as developments unfold surround the terms of any deal. The prospect of a no deal scenario is also a worry for those clients holding sterling who are looking at buying Euros. Those clients who need to sell Euros would be wise to get in touch and consider taking advantage of the recent fall in the price of sterling against the Euro.

Focus now moves to the Bank of England interest rate decision on Thursday which could result in an even more volatile end to the week. Any positive noises from Mark Carney or any suggestion that interest rates will in fact rise later this year could help see the pound rally although my view is that Mark Carney will be relatively tight lipped at this meeting. Any discussion on Brexit however could see market volatility and this is a subject the Governor has been known to wade into.

To discuss how these key events this week are likely to impact on your own individual currency requirements then please feel free to get in touch with me at jll@currencies.co.uk

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