GBP/EUR Exchange Rate Stalls as Ministers Raise Brexit Concerns
The Pound Euro (GBP/EUR) exchange rate is range bound this morning after cabinet minister raised a number of concerns regarding potential Brexit compromises with the EU.
At the time of writing the Pound Euro GBP/EUR exchange rate remains virtually unchanged this morning, with the pairing trading around half a cent down from the week’s best levels.
Pound (GBP) Exchange Rates Flat on as UK Cabinet Unconvinced by Irish Border Proposals
The Pound (GBP) stuck in a narrow range against the Euro (EUR) and many of its other peers this morning as Theresa May’s cabinet expressed its unease over potential compromises being made to help push through a trade deal.
Ministers reported raised concerns that the UK could remain stuck in a customs union with the EU for an ‘open-ended’ period.
This has further shaken hopes that a Brexit deal could be finalised over the next couple of days as the a revolt from her MP’s would leave Theresa May’s hands tied.
Euro (EUR) Remains Driven by Italian Budget Turmoil
Meanwhile, the Euro (EUR) is treading water this morning as concerns over Italy’s budget continue to drag on sentiment.
Recent concerns are centred on the possibility that the EU may reject Italy’s budget proposal, sending the country’s ruling coalition back to the drawing board and creating further tensions between Rome and Brussels.
Tim Riddell, Research Analyst at Westpac bank suggests:
‘If it is rejected, Italy will need to rework the budget over a subsequent three weeks. EU Leaders’ meeting (17th-18th) could become be a forum for budget discontent. Unless there is a quick compromise over Italy’s budget.’
GBP/EUR Exchange Rate Forecast: Will a Brexit Deal Be Reached Before the EU Summit Next Week?
Looking ahead to next week’s session, movement in the Pound Euro (GBP/EUR) exchange rate is likely to continue to be dominated by Brexit.
The key question on everyone’s lips will be whether the UK and EU will be able to hammer out a Brexit deal before the start of the EU summit of leaders on Wednesday.
This could see Sterling met by heavy losses if the two sides are unable to resolve their outstanding issues surrounding the Irish border and a deal is not agreed by the start of the week.
In terms of data The UK’s latest labour figures may weigh on the Pound early next week if wage growth slows as expected in August.
Meanwhile EUR investors will be focuses on the Eurozone’s latest economic sentiment index, with the Euro likely to weaken if sentiment weakens as expected in October.
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