Are you a Brit living in Spain, France or Italy, and thinking of selling your property abroad? If so, when you sell your holiday home, you might then need to transfer money to the UK.
If this is the case, it might interest you to know that the euro to pound interbank exchange rate has today hit 0.8836, just -0.09% below its highest in 19 weeks.
To put this euro to the pound today into context for you, back at the start of this month, on May 4th, the euro was as weak as 0.8493 versus sterling. So in the three weeks since, the EUR has strengthened by +3.25 cents versus the GBP, or by +4.03%.
To contextualise this rise in the euro versus sterling for you, at today's interbank exchange rate of 0.8836, €250,000 would be worth £220,900. By contrast, 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, as the interbank exchange rate has risen, that's an increase in the pound total of +£8,575.
This could be helpful for you, for when you decide to transfer money to the UK, from your Spanish, French or Italian bank account. This is because you might now get a notably higher sterling total, compared to if you'd exchanged euros for pounds at any time in the recent past.
You can stay up-to-date with the euro to pound interbank exchange rate on Pure FX's EUR to GBP Exchange Rate Updates page.
Alternatively, you can check the euro's value versus sterling today, and where the interbank exchange rate has been for the past seven days, on our Rates & Tools page.
A first partial explanation why the euro has neared this 19-week high versus sterling is because it's been reported that Germany might veto a further Brexit extension.
In addition, another reason why the EUR has gained in value versus the GBP is because it's feared that Parliament might be unable to stop the next Prime Minister from pursuing a 'No Deal' Brexit.
Let's look more closely at these factors why the euro has strengthened versus the British pound. You might find this helpful, to decide when to transfer money to the UK in 2019.
EUR to GBP Gains, as Germany Could Veto Further Brexit Extension
A first factor why the euro has strengthened against British sterling is because it's been reported that Germany could veto a further Brexit extension.
If this is true, this would put the UK under further pressure to agree a form of Brexit by the current deadline of October 31st, or risk exiting without a deal. In turn, a 'No Deal' Brexit might damage the UK economy.
According to The Telegraph newspaper's Brexit and Europe Correspondent James Rothwell yesterday, Germany might oppose further extending the UK's Brexit deadline, unless there's a significant reason to do so.
"I'm told Germany will veto an extension to Article 50 at the next EU summit in October unless the UK makes major progress, such as announcing a general election or a second referendum," writes Mr. Rothwell.
This adds to the growing uncertainty over Brexit. At present, financial markets are worried that whoever replaces Theresa May as Prime Minister and Conservative Party leader might favour a 'No Deal' Brexit.
For example, Tory leadership frontrunners Boris Johnson and Dominic Raab have both said recently that they'd be willing to take the UK out of the EU without a deal.
In turn, if the UK exits the EU without a deal, we'd face tariffs and extra bureaucracy to import and export with Europe, our closest trading partner. This could slow the UK's GDP (Gross Domestic Product) growth in future.
Neil Wilson, analyst at Markets.com, says that: "The pound just can’t catch a break. No-deal Brexit fears continue to weigh on sterling."
Euro Gains Versus Pound, as Parliament May Struggle to Stop 'No Deal' Brexit
Moreover, a second contributing reason why the euro to pound interbank exchange rate has neared this 19-week high is because it's been reported that, if the next Prime Minister is determined to pursue a 'No Deal' Brexit, Parliament would struggle to stop him or her.
In turn, this lifts the possibility that a 'No Deal' Brexit might occur in the coming months.
According to a new report by the Institute of Government this week, if whoever replaces Theresa May as Prime Minister wants the UK to exit the EU without a deal, they could do this.
In turn, the ability of MPs to stop the next Prime Minister from pursuing a 'No Deal' are limited, short of calling a vote of 'No Confidence' in the government, and forcing a general election.
This raises the stakes over the UK's Brexit outcome even higher. This is because, if for example Boris Johnson becomes Prime Minister and he opts for a 'No Deal' Brexit, the only way for MPs to stop him would be to vote for 'No Confidence' in Mr. Johnson, for a general election.
This then raises the possibility that Jeremy Corbyn's Labour Party could win, replacing the Tories in government.
Speaking earlier this week on Sky News, Chancellor Philip Hammond said that he's prepared to force a vote of 'No Confidence' in the government, if the next Prime Minister goes for a 'No Deal' Brexit.
Mr. Hammond said: "I couldn’t support a government policy stance that said as a matter of choice we are going to pursue a no-deal exit. I am very clear that the national interest trumps the party interest."
Euro to Pound Exchange Rate Rises, as Barnier Says No Renegotiation
Also, another partial explanation why the euro to the pound today has climbed is because the EU's Chief Brexit Negotiator, Michel Barnier, has confirmed that, whoever becomes the next British Prime Minister, the EU won't renegotiate the Brexit deal it agreed with Theresa May.
As a result, this further limits the UK's future course of action over Brexit.
Speaking in an interview with the New York Review of Books this week, Mr. Barnier said that: “If the UK wants to leave in an orderly manner, this treaty is the only option. If the choice is to leave without a deal – fine. If the choice is to stay in the EU – also fine.”
“You cannot leave the EU, the single market, the customs union, and ask for no checks and controls at the same time,” added Mr. Barnier.
Mr. Barnier's comments tell us that the EU is unwilling to renegotiate Brexit with the next British Prime Minister, and we must either accept the deal, leave with 'No Deal' or cancel Brexit.
This puts greater pressure on the UK to make up its mind over Brexit, ahead of the October 31st deadline. Given this, this has contributed to weaken the value of British sterling too.
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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.