Pure FX Blog

13 October 2017

Pound Hits 1-Week High Versus Euro, as EU May Offer 2-Year Transition

The pound has hit 1.1214 versus the euro today, its highest since October 4th, as the EU may offer the UK a 2-year Brexit transition deal. Image credit: Nimalan Tharmalingam.

The pound has hit 1.1214 versus the euro today, its highest since October 4th, as the EU may offer the UK a 2-year Brexit transition deal. Image credit: Nimalan Tharmalingam.

by Peter Lavelle

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

Sterling bounces back versus the common currency! The pound to euro interbank exchange rate has hit 1.1214 today, its highest in 1 week, or since October 4th.

The pound has strengthened against the euro, because the EU may offer the UK a 2-year transition deal for Brexit, according to a new report in German newspaper Handelsblatt.

According to Handelsblatt, EU Chief Negotiator Michel Barnier is pushing to offer the 2-year transition deal, and will speak to EU ambassadors today about it, thus lifting the pound.

Just yesterday, Mr. Barnier told journalists that he thinks a “breakthrough” over the Brexit negotiations is possible within the next 2 months, thereby strengthening sterling too.

This has boosted the pound, because if the EU and the UK agree a Brexit transition deal, this will bolster the UK’s economy, as it exits the EU, after the deadline in March 2019!

Pound rises, as UK manufacturing “robust” says BCC

Moreover, the pound has also strengthened against the euro, because UK manufacturing is “robust”, according to a new report by the British Chamber of Commerce (BCC) this week.

According to the BCC’s quarterly survey of +7,000 UK firms, a net +25% enjoyed increased sales between July and September, pointing to UK economic strength, and lifting the pound.

“The manufacturing sector saw a welcome improvement, boosted in part by stronger growth in key export markets,” says BCC head of economics Suren Thiru, thus boosting sterling.

What’s more, a net +52% of UK companies said that they’re looking to hire new employees, pointing to robust UK economic growth in the coming months, and strengthening the pound too.

With all this in mind, the pound to euro interbank exchange rate has hit this 1-week high 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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