Pure FX Blog

14 November 2017

Euro Reaches 3-Week High Versus Pound, Could Continue to Climb

The euro to pound interbank exchange rate has hit its highest in 3 weeks today, at 0.8924, as Conservative MPs doubt prime minister Theresa May's ability to deliver Brexit.  Image credit: Nimalan Tharmalingam.

The euro to pound interbank exchange rate has hit its highest in 3 weeks today, at 0.8924, as Conservative MPs doubt prime minister Theresa May’s ability to deliver Brexit. Image credit: Nimalan Tharmalingam.

by Peter Lavelle

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

The common currency strengthens further versus sterling!

The euro to pound interbank exchange rate has hit its highest in 3 weeks today, or since October 24th, at 0.8924.

What’s more, looking ahead, the euro could continue to rise against the pound. Here are 5 reasons why:

1. According to The Sunday Times last weekend, 40 Conservative MPs are prepared to sign a letter of “no confidence” in prime minister Theresa May.

This may weaken the pound, because this Sunday Times report puts into doubt Mrs. May’s ability to lead her government, as well as the Brexit talks.

2. In the House of Commons, MPs have tabled over 400 amendments to the government’s EU Withdrawal Bill.

This could drag down sterling, because this vast number of amendments tells us that Brexit’s final form remains up in the air.

3. EU chief negotiator Michel Barnier has given the UK 2 weeks to make its Brexit bill offer, and Mr. Barnier added that no deal is a “possibility”.

This may weigh on the pound, because Mr. Barnier’s ultimatum puts more pressure on the UK to make a Brexit financial offer to the EU.

4. UK Brexit secretary David Davis told Sky News last weekend that the UK doesn’t have to offer “a number or a formula” for the Brexit bill.

This could hurt sterling, because Mr. Davis’s comments lift the chances that the Brexit trade talks between the UK and EU will be delayed further.

5. It’s forecast that UK economic data due this week will show that inflation continues to rise faster than wage increases.

This may hit the pound, because when UK inflation rises faster than wages, Britons feel less inclined to whip out their wallets to spend.

With all this in mind, the euro to pound interbank exchange rate could exceed this 3-week high!

Get a free euro to pound exchange rate quote

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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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