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Despite the lingering threat of a no-deal Brexit and a cautious Bank of England (BoE), the British Pound to Euro (GBP/EUR) exchange rate is holding most of its recovery attempt this week. The Euro has seen little impact from news and currency movement in recent sessions, leaving Brexit speculation to be the primary cause of the pair’s movement – which could persist until there is a more concrete outcome for the Brexit process.
Since opening this week at the level of 1.0920, GBP/EUR has been trending with an upside bias, attempting to recover last week’s losses.
BoE holds rates at 0.1%, higher inflation no barrier to further easing in the event of a no-deal Brexit, Pound Sterling exchange rates edge lower
The Bank of England decision was in line with expectations. The bank warned over potential disruption early in 2021 and indicated that it was ready to ease policy further if conditions deteriorate even if inflation rises. The comments suggest that a no-deal Brexit would likely result in further easing even if the pound Sterling rate slides.
The pound-to-dollar rate edged back to just below 1.3600 from 30-month highs at 1.3620 with the euro-to-pound rate at 0.9000 from 0.8985 lows ahead of the decision.
The GBP/USD spot rate at time of writing: +0.65% higher @ $1.35901.
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There has been further optimism that a UK/EU trade deal could be announced on Friday or over the weekend. Sterling has held firm, but Pound-to-Dollar (GBP/USD) exchange rate gains have been driven by the US dollar slide. GBP/USD peaked at 1.3620 before a retreat to 1.3580.
The Euro-to-Pound (EUR/GBP) exchange rate is above 0.9000 with further reservations over UK fundamentals. The pound was unable to make headway against the Australian and Canadian dollars.
Barnier positivity not matched by UK government
Foreign Exchange Rates Today 17 12 2020: UK Pound Smashes 1 35 Vs Dollar, Euro Rallies Through 1 22 exchangerates.org.uk - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from exchangerates.org.uk Daily Mail and Mail on Sunday newspapers.
GBP/USD Exchange Rate Heads Higher on Brexit Progress
The Pound to US Dollar (GBP/USD) exchange rate continued to rise today, hitting a 31-month best as optimism over a post-Brexit trade deal has given a boost to UK market mood.
Nonetheless, Richard Hunter, the head of markets at Interactive Investor, warned that hopes for a ‘final breakthrough on Brexit negotiations remained finely balanced’. ‘Sterling has seen some benefit from the irrepressible optimism that a last-gasp agreement will be made, although comments from the negotiators on both sides remain guarded said Hunter.
Today also saw Michel Barnier, the EU’s Chief Brexit Negotiator, say that there had been ‘good progress’ made in trade talks, despite ‘last stumbling blocks’ remaining.