In this look at the euro rates today, it may interest you to know that the EUR to GBP interbank exchange rate has hit 0.8791. This is the euro's highest point versus the pound in close to 14 weeks, or since February 15th.
By contrast, back on May 4th, the euro was as weak as 0.8493. So the Eurozone's common currency has since strengthened by close to 3 cents, or by +3.5%.
This might be helpful information for you, because when you transfer money to the UK from your bank account in Spain, France or Italy, you could now get a higher sterling total, compared to if you'd exchanged currencies in the recent past.
This may benefit you, if you're a Eurozone business owner making international payments to the UK, a European citizen emigrating to the UK, or a Brit selling your holiday home in Spain or France to repatriate to Great Britain.
To contextualise this rise in the value of the euro versus the pound for you, at today's interbank exchange rate of 0.8791, €250,000 would be worth £219,775.
By comparison, at the interbank exchange rate on May 4th of 0.8493, €250,000 would have been worth just £212,325.
So for the same euro amount, that's an increase in pounds of +£7,450.
A first reason why the euro to pound interbank exchange rate has hit this 14-week high is because Prime Minister Theresa May's "new" Brexit deal looks set to be rejected by MPs.
In addition, a further factor for the EUR's gains versus the GBP is because UK manufacturing output fell in May, according to the Confederation of British Industry (CBI) yesterday.
Let's look more closely at these explanations why the euro has climbed versus the pound. This might help you, for your money transfers to the UK, from Spain, France or Italy.
Euro to Pound Rate Rises, as May's Brexit Deal to Be Rejected
A first reason why the euro rates today versus the pound have hit this 14-week high is because Prime Minister Theresa May's "new" draft Brexit deal looks set to be rejected by MPs.
In turn, financial markets are concerned that this could exacerbate the uncertainty regarding the UK's EU exit, including raising the risk that the UK might exit with "No Deal".
Yesterday, on Tuesday 21st May, Mrs. May revealed her new draft Brexit deal. This is called the EU Withdrawal Agreement Bill (WAB), and is the Prime Minister's fourth attempt to pass her Brexit agreement through Parliament.
The WAB includes provisions for MPs to vote on whether a referendum on Mrs. May's deal should be held, and what sort of Customs Union the UK wants with the EU. The draft is scheduled to be voted on by MPs in the week starting June 3rd.
The Prime Minister's hope upon announcing this draft deal was to win support from the opposition Labour Party, to win a majority in the House of Commons.
However, just a short while after Downing Street announced the bill, it became clear that it wouldn't win support among most MPs, reports The Guardian newspaper.
For example, both the former Brexit Secretary, David Davis, and the head of the European Research Group, Jacob Rees-Mogg, have said that they may vote against Mrs. May's draft.
Both men said that, while they voted in favour of Mrs. May's agreement on the third attempt, this fourth attempt includes new concessions to Labour, so they might vote it down.
Already, financial markets are pricing in the probability that the Prime Minister's fourth attempt will fail, and the UK's Brexit outcome will remain up-in-the-air.
For example, Jonas Goltermann at Capital Economics says that: "As the new Brexit deadline approaches, we think that investors will rebuild short positions in Sterling, putting renewed downward pressure on the currency."
If Parliament again rejects Mrs. May's draft, there are several possibilities about what might happen next. Mrs. May could resign, in which case the Conservatives will have a leadership contest.
This could favour former Foreign Secretary Boris Johnson. Then, the UK might exit the EU with "No Deal", to get Brexit done with, regardless of the economic cost.
However, that said, it's also possible that a general election might be held, which could favour Jeremy Corbyn's Labour Party. If Mr. Corbyn becomes Prime Minister, he could cancel Brexit, hold a second referendum, or return to negotiations with the EU.
This uncertainty is weighing on the UK economy, so has strengthened the value of the euro versus the pound.
EUR Versus GBP Gains, as UK Factory Output Falls
In addition, a second reason why the euro to pound interbank exchange rate has touched this 14-week high is because the UK's industrial output fell sharply in May.
In turn, it's thought that this could slow the UK's GDP (Gross Domestic Product) growth in Q2 2019, between April and June.
According to the CBI's (Confederation of British Industry) Industrial Trends survey for May 2019, UK industrial output fell to -10.
This is well below financial markets' and economists' forecasts for -5, as well as April's result of -5. In particular, this is the sharpest decline in Britain's manufacturing production since October 2016.
UK manufacturing output dropped in May, especially because factories were building up stockpiles in case of a "No Deal" Brexit earlier in 2019, and this has now finished.
To be specific, British factories now have the largest stockpile of finished goods since 2009, during the global financial crisis. In turn, this could lead to slower output, looking ahead.
Following these results, Howard Archer, an economist at the EY ITEM Club, said that UK manufacturers' performance could be "significantly weaker" in the coming months.
“The likelihood is that the manufacturing sector in particular and the economy overall will take a hit in second quarter at least while some of the stockpiling that occurred in the first quarter is unwound,” said Mr Archer.
Meanwhile, CBI economist Anna Leach added that: "(With) a sharp decline in order books, it’s clear why manufacturing firms are so keen to see a swift end to the current Brexit impasse."
This fall in the UK's industrial output has weakened the pound, first, because UK factories account for roughly 10% of Britain's economy.
Hence, when UK manufacturing production falls, this could slow down the UK's economic growth. In turn, this means that the UK could be less prosperous, which might lead to fewer people spending in the shops, or higher joblessness.
A second reason why sterling has fallen following these downbeat CBI Industrial Trends results is that, as a result, the Bank of England may be less likely to hike interest rates, above their current 0.75%.
This is because, when the UK economy slows, it's thought better to have lower borrowing costs, to encourage businesses to take out loans and invest, to encourage growth.
So to conclude, the euro to pound interbank exchange rate has hit a 14-week high today, of 0.8791. In part, this is because Prime Minister Theresa May’s fourth draft Brexit deal looks set to be rejected, while UK industrial output has fallen.
This may benefit you, to transfer money to the UK, and receive a higher pound total in your UK bank account, compared to the recent past.
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Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email email@example.com.