GBP/EUR Exchange Rate Subdued as Markets Await Johnson-Varadkar Meeting
The Pound Euro (GBP/EUR) exchange rate is struggling to find momentum this morning as markets brace for an upcoming meeting between Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar.
At the time of writing the GBP/EUR exchange rate is trading at around €1.1107, trading just shy of a one-month low.
Upside in Pound (GBP) Appears Limited ahead of Johnson-Varadkar Meeting
Boris Johnson and Irish Taoiseach Leo Varadkar are to meet this afternoon, to discuss the UK’s Brexit proposals and whether a deal may still be salvageable.
There have been a number of headlines this week proclaiming that Brexit talks between the UK and EU are on the verge of collapse, fears of which have sent the Pound (GBP) plummeting to a one-month low against the Euro (EUR).
This could be the last chance for the two sides to salvage talks.
Ahead of the meeting Johnson has said that he is ‘cautiously optimistic’ about the possibility of a deal.
But it’s hard to see Varadkar sharing in this optimism, with the Taoiseach suggesting earlier this week that ‘big gaps’ remain between the two sides and that it would be ‘very difficult’ for a deal to be agreed by the 31 October deadline.
Most observers agree there appears to be little scope for today’s meeting to deliver any breakthrough.
As a result we expect the negative sentiment surrounding Sterling to remain, especially as Johnson continues to insist that the UK must leave the EU at the end of the month.
Division in the ECB to Lift the Euro (EUR)?
In focus for EUR investors today will be the publication of the minutes from the European Central Bank’s (ECB) September policy meeting.
Outgoing ECB President Mario Draghi announced the bank would be restarting its quantitative easing programme following its meeting last month.
But the move faced some criticism from within the bank, with a number of policymakers questioning the effectiveness of more QE.
Today’s minutes may more clearly lay bare the divisions within the ECB, something which may prove positive for the Euro (EUR) if there appears there may be significant enough pressure from policymakers to may force a change of course by Draghi’s successor Christine Lagarde when she takes the helm in November.
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