GBP/EUR Exchange Rate Weakens as MP’s Reject May’s Brexit Deal for a Third Time
UPDATE: The Pound Sterling to Euro (GBP/EUR) exchange rate fell back again on Friday afternoon, touching lows of €1.1561 as MPs voted to reject Theresa May’s Brexit withdrawal deal on again.
The government lost the vote by 344 to 286, a smaller majority that previous votes but enough to suggest that the PMs vote may be finished, stoking fears of a no-deal Brexit on 12 April.
Ayes 286 Noes 344 – govt loses again by significant chunk, altho much better result for them than before
— Laura Kuenssberg (@bbclaurak) March 29, 2019
While the defeat was widely expected, resulting in GBP/EUR bouncing back from its worst levels, it was still enough for the pairing to close the week almost a cent down.
GBP/EUR Exchange Rate Sinks Following Theresa May’s Third Defeat
UPDATE: Once again, the UK government’s Brexit plan was defeated on Friday afternoon as MPs rejected the Withdrawal Agreement by a majority of 58 votes.
The UK is still set to leave the EU on the 12th of April with no deal, which spooked investors and caused the Pound Sterling to Euro (GBP/EUR) exchange rate to tumble at the time of writing.
However, analysts believe that a further delay to the Brexit process is still likely, which will mean Britain will need to take part in EU elections.
Currently GBP/EUR is trading at a rate of €1.1606 on the inter-bank market.
GBP/EUR Exchange Rate Slides as Brexit Vote in Focus
The Pound Sterling to Euro (GBP/EUR) exchange rate opens today’s session on the back foot as markets brace for the possibility of a third Brexit defeat for Theresa May this afternoon.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1614 – virtually unchanged from this morning’s opening levels, but still almost a cent below the week’s start.
Pound (GBP) Faces Volatility as May at Risk of Third Brexit Vote Defeat
The Pound (GBP) is expected to be met by heightened Brexit uncertainty throughout today’s session as MPs hold yet another vote on Brexit.
On the day in which the UK was original set to leave the EU, MPs will instead be debating whether to accept part of Theresa May’s Brexit deal.
After a third ‘meaningful vote’ on May’s deal was ruled out by the Speaker, John Bercow, the government has put forward a vote on just the withdrawal agreement, without the accompanying political declaration.
Should the vote pass this will meet the requirements laid out by the EU to delay the UK’s exit from the EU to 22 May.
However, despite a number of rebel Conservative MPs now suggesting they will back the deal after May offered to resign if it passed, analysts suggest the chances of the PM winning today’s vote remain slim, dampening confidence in Sterling this morning.
Euro (EUR) Buoyed by German Economic Data
At the same time the Euro (EUR) accelerated against the Pound (GBP) ahead of the vote this morning as markets welcomed the release of Germany’s latest retail sales figures.
According to data published by Destatis, German retail sales rose by 0.9% in February, beating forecasts that sales growth would have instead contracted by 0.9%.
However tempering the release somewhat was the revision to sales growth at the start of the year, as it was revised down from 3.3% to 2.8% in January.
GBP/EUR Exchange Rate Forecast: Sterling to Tumble if Brexit Vote Defeated?
Looking ahead, the Pound Euro (GBP/EUR) exchange rate looks poised to fall later this afternoon should May be handed another defeat in Parliament, as is expected, as this would cast even greater uncertainty over the whole process.
Looking past the vote to the start of next week we could see the release of the UK’s latest manufacturing PMI place even further pressure on Sterling, should the figures show that Brexit uncertainty led UK factories to continue to slash staff levels in March.
Meanwhile the focus for EUR investors at the start of next week is likely to be on the release of the Eurozone’s latest CPI figures.
This could leave the Euro on the defensive on Monday morning if inflation in the bloc continues to drift lower and further away from the European Central Bank’s (ECB) target rate of 2%.