Pure FX Blog

13 November 2017

Euro Reaches 10-Day High Versus Pound, as Tory MPs Plan to Oust May

The euro to pound interbank exchange rate has reached its highest in 10 days today, at 0.8889, as reports have emerged that a group of Conservative MPs are prepared to oust prime minister Theresa May. Image credit: William Lepretre.

The euro to pound interbank exchange rate has reached its highest in 10 days today, at 0.8889, as reports have emerged that a group of Conservative MPs are prepared to oust prime minister Theresa May. Image credit: William Lepretre.

by Peter Lavelle

Welcome to Pure FX’s latest update of the euro to pound interbank exchange rate.

The common currency strengthens versus sterling! The euro to pound interbank exchange rate has hit 0.8889 today, its strongest in 10 days, or since November 2nd.

The euro has risen against the pound, because reports have emerged over the weekend that a group of Conservative MPs is prepared to oust prime minister Theresa May.

According to The Sunday Times, 40 Tory MPs are prepared to sign a letter of “no confidence” in Mrs. May, just -8 MPs short of the number needed to trigger a leadership contest.

This has weakened the pound, first because this Sunday Times report suggests that Mrs. May’s government remains fragile, following the departure of 2 ministers last week.

This has also dragged down sterling, because if Tory MPs oust Mrs. May, this could destabilise the Brexit negotiations, with just 15 months left until the March 2019 deadline!

Pound falls, as UK won’t offer a Brexit bill “figure”

What’s more, the euro to pound interbank exchange rate has also strengthened, because the UK won’t offer a figure for the Brexit bill, according to Brexit secretary David Davis.

Speaking on Sky News over the weekend, Mr. Davis said that there’s no need for the UK to offer “a number or a formula” for the Brexit bill, thereby dragging down the pound.

This has weighed on the pound, first because Mr. Davis’s comments suggest that the UK may miss a December deadline for the bill, needed to begin Brexit trade talks with the EU.

This has also weakened the pound, because the Brexit secretary’s comments raise the odds that the UK may leave the EU without a deal, which may slow the UK’s GDP growth.

In addition, EU chief negotiator Michel Barnier told French newspaper Le Journal du Dimanche over the weekend that no Brexit deal is a “possibility”, thus hurting sterling too.

With all this in mind, the euro has hit this 10-day high against the pound today!

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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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