GBP/EUR Exchange Rate Muted as Brexit Concerns Mount
The Pound Sterling to Euro (GBP/EUR) exchange rate is stuck on the defensive this morning, trading close to a one-week low as Brexit worries continue to bludgeon Sterling sentiment.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1550, virtually unchanged this morning but down over a cent from yesterday’s starting rate.
Brexit Chaos Drives Pound Sterling (GBP) into a Corner
The Pound (GBP) remains on the back foot against the Euro (EUR) this morning, with the GBP/EUR exchange rate stuck at a one-week low in light of recent Brexit developments.
Sterling was hammered on Wednesday after Theresa May vowed not to delay Brexit beyond June as she made a formal request to the EU for an extension.
This came as a major disappointment to GBP investors, who were hoping for a lengthier extension to maintain the status quo for longer as well as potentially allowing for a second referendum.
In response, European Commission President Donald Tusk said a short delay would be possible but only if the PM was able to get her withdrawal deal through parliament.
This further dragged on the Pound as the chances of a deal getting through Parliament appear slim, especially after a speech by May yesterday evening in which she blamed the Brexit delay on MPs seeking to frustrate the process.
The PM is now set to travel to Brussels ahead of the latest EU summit where she will attempt to sell the other 27 EU leaders on her Brexit deal.
This could drive further volatility in the Pound today as a number of EU countries remain ‘sceptical of the value of making an offer’ on an extension.
Should the EU be unable to reach a unanimous decision on the delay, then we could see Sterling sink even further for fear it could put the UK on the path towards a no-deal Brexit.
GBP/EUR Exchange Rate Forecast: Will the BoE Rate Decision Have any Impact on Sterling?
Looking ahead, Brexit is likely to remain the main catalyst of movement in the Pound Euro (GBP/EUR) exchange rate today as markets brace for the EU Summit of leaders later this evening.
In the meantime, the Bank of England (BoE) will deliver its latest rate decision later this afternoon.
Any GBP investors hoping that the BoE will offer a reprieve for Sterling are likely to be disappointed however, with the bank likely to remain cautious in its forward guidance as the ‘fog of Brexit’ continues to limit the BoE’s options.
Meanwhile, potentially limiting the appeal of the Euro today will be the release of the Eurozone’s latest consumer confidence figures later this afternoon, with economists forecasting sentiment will have remained gloomy in March.