Adding further weight to the speculation around the agreement of the Brexit bill, Michel Barnier, the EU’s Chief Brexit Negotiator has revealed he hopes that once a final issue have been ironed out, they could announce in the next few days that the UK and the EU have agreed on the sum for the UK/EU “divorce” bill.
During months of negotiations the final settlement figure has been a sticking point, with neither party rumoured to be able to agree the amount the UK will pay upon leaving the EU.
Once there is an agreement it will be presented to the European Council on December 14th, when leaders of the 27 EU nations will meet for the EU Summit. It has already been announced that the financial aspects of the Brexit divorce are on the agenda and now we will see if the decision is positive and the Brexit negotiations can move on to trade talks.
This potential Brexit progress between the EU and the UK has helped Sterling rally against the Euro, making the Pound more expensive to buy with Euros. As negotiations progress on to trade talks the Euro could suffer further against the Pound. This future volatility seems likely given the movement we have seen today, which was simply on speculation that there will be an agreement on the settlement. This suggests there could be more volatility as we approach the EU Summit in mid-December.
Progress on to trade talks between the EU and UK could be a significant moment for the EUR/GBP exchange rate, most likely Euro negative. It would also provide some certainty for Sterling investors.
Data that could affect Euro rates tomorrow
Tomorrow at 10:00am we will see Consumer Price Index data for November which is expected to show an improvement to 1.6%. This could be positive for the Euro, especially given that earlier this year the European Central Bank (ECB) voiced some concerns for inflation moving into 2018. At 10:00am we also have the latest Unemployment rate figure release for October which is expected to reveal 8.9% (the same as the previous month).