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Euro to Pound Rate Hits 2-Week High, on Brexit Vote Doubts

Market CommentaryEuro to Pound Rate Hits 2-Week High, on Brexit Vote Doubts
Euro to Pound Rate Hits 2-Week High, on Brexit Vote Doubts
Euro to Pound Exchange Rate. Image credit: Nerivill.

Please find below Pure FX's latest update of the euro to pound interbank exchange rate.

If you intend to transfer money to the UK from the Eurozone, it may interest you to know that the euro to pound interbank exchange rate has hit 0.8670 today.

This is the interbank exchange rate's highest figure in 2 weeks, or since February 25th.

To put this into context for you, back on February 27th, the common currency was at just 0.8537 versus sterling. So, it's since risen by over +1.25 cents, or +1.55%.

At this 2-week high interbank exchange rate, €250,000 in British sterling would be worth £216,750, compared to £213,425 on February 27th. That's a rise of +£3,325.

EUR vs GBP Strengthens, as MPs to Vote on Brexit Deal

The first reason, of which there are many, why the euro to pound interbank exchange rate has hit this 2-week high, is because of continuing uncertainty over Brexit.

To be specific, this Tuesday at the UK's Parliament, MPs are set to again vote on prime minister Theresa May's Brexit deal. It's thought that MPs will once more vote down the deal.

If so, this will put the UK under notable pressure to either extend its 'Article 50' Brexit negotiating window, or risk leaving the EU without a deal, on the deadline of March 29th.

Thus, this uncertainty is one reason why the euro has risen versus the pound.

Euro Rises Against Pound, as Firms Move Assets to EU

Another reason why the Eurozone's common currency has strengthened versus sterling is because UK financial firms are moving trillions in assets to the EU ahead of Brexit, says a new survey.

According to thinktank New Financial's survey of over 275 financial firms, reported today in Reuters, firms are shifting $1.2 trillion in assets plus thousands of staff to the continent.

This is to protect these firms in case there's a 'No Deal' Brexit. William Wright, founder of New Financial, says that "business will continue to leak from London to the EU".

This too has helped to lift the euro versus sterling.

Euro to Pound Rate Climbs, as Established Businesses Shed Jobs

In addition, a further partial explanation why the euro to pound interbank exchange rate has risen is because the UK economy is showing signals that point to recession, according to a new report.

In 2018, although start-up firms created over one million new jobs, established companies shed 613,000 jobs, says research by the Enterprise Research Centre, cited today by Reuters.

As a result, were the creation of new businesses in the UK to slow, for example following a hypothetical “hard” Brexit, unemployment would rise, warns the report.

So, in part because of this, the EUR has climbed versus GBP.

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You’ll get a highly competitive euro to pound exchange rate for your money transfer.

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 peter.lavelle@purefx.co.uk.

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