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Euro to The Pound Today: EU to Decide Brexit Extension

Market CommentaryEuro to The Pound Today: EU to Decide Brexit Extension
Euro to The Pound Today: EU to Decide Brexit Extension
Euro to The Pound Today. Image credit: Public Domain Pictures.

The euro to the pound interbank exchange rate has risen by over a cent in the last few days, or by +1.36%, from 0.8507 to a high of 0.8623 at the time of writing.

If you're a Briton living in Spain or France, or a European thinking of emigrating to the UK, and you plan to transfer money to the UK, this could be useful information for you.

The EUR to GBP exchange rate has strengthened, because there's uncertainty over whether the EU will grant the UK its second Brexit extension, and whether the Conservatives and Labour will agree a Brexit deal.

You can get a highly competitive euro to pound exchange rate by entering your details into the "Get A Free Quote" form on the right-hand side of this page.

Let's take a closer look at what's affected the value of the euro to the pound today, and which factors could affect the exchange rate, looking ahead.

EU to Decide Whether to Grant UK Second Brexit Extension

A first factor that's contributed to lift the euro to pound interbank exchange recently is uncertainty over whether the EU will grant the UK its second Brexit extension this week.

At present, the UK's Brexit deadline is this Friday 12th April. By default, the UK will exit the EU without a deal.

To prevent this, last Friday, the President of the European Council, Donald Tusk, proposed granting the UK a 12-month "flexible" extension to the Brexit timetable. This is to give the UK's Conservative and Labour Parties time to agree a Brexit deal that they can then present to the EU.

However, following Mr. Tusk's proposal, France, Belgium and Spain announced that they opposed giving the UK a long extension. These 3 countries only want to give the UK a 2-week extension, to either force the UK to accept the previously-negotiated draft deal, or to prepare for a "No Deal" Brexit, reports newspaper Metro.

The EU's 27 leaders will meet this Wednesday to decide whether to grant the UK a further Brexit extension. It remains to be seen what they'll decide, so this uncertainty has affected the euro to the pound today.

Conservatives and Labour Face Grassroots Opposition to Deal

In addition, another factor that's influenced the euro to pound interbank exchange rate recently is the growing grassroots opposition to the Conservative and Labour Parties reaching a Brexit deal.

Last week, UK Prime Minister Theresa May and Labour leader Jeremy Corbyn opened talks to agree a cross-party Brexit deal. The hope is to agree a deal that can pass in Parliament, to then present to the EU. In particular, Mrs. May said that she wants to break the "logjam" over Brexit.

However, following Mrs. May's and Mr. Corbyn's initial talks last week, there's growing opposition within both the Conservative and Labour Parties to a deal. For example, over the weekend, 100 current and would-be Tory councillors wrote to Mrs. May, to say that support for the party is "in freefall", reports newspaper The Financial Times.

Meanwhile, over 80 Labour MPs have warned Mr. Corbyn, saying that if he agrees a Brexit deal with Mrs. May without submitting this to a public vote, the agreement would have "no legitimacy". In addition, many of Labour's voters voted for "remain" in the UK's Brexit referendum, so they may feel betrayed if Mr. Corbyn makes a deal.

As a result, there's growing pressure on Mrs. May and Mr. Corbyn to abandon their talks. This though would further contribute to the uncertain outlook for the UK's Brexit deal, so has contributed to strengthen the euro to the pound today.

UK GDP, European Central Bank May Affect Exchange Rate This Week

Looking to this week meanwhile, 2 factors that look likely to influence the exchange rate this week are the UK's Gross Domestic Product (GDP) figures for February, plus the European Central Bank's latest meeting.

On Wednesday at 09.30 GMT, UK economic growth (GDP) figures for February will be released, by the Office for National Statistics (ONS). The financial markets forecast that UK GDP stagnated in February, at 0.0%. If so, this could suggest that Brexit uncertainty is weighing on Britain's economic growth, which might impact the pound too.

In addition, on Wednesday, the European Central Bank (ECB) will make its latest interest rate decision. It's widely predicted that the ECB will keep interest rates at their all-time low of 0.0%, to support the Eurozone's economic growth.

That said, the ECB could push back its forecast for when it plans to lift interest rates, from the end of this year to mid-2020. If so, this would suggest that the Eurozone economy needs continued monetary support, and so affect the euro, according to financial news source Reuters.

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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 peter.lavelle@purefx.co.uk.

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