The Pound has recouped its losses against the Euro as the Supreme Court ruling draws at an end. Pound Sterling is now trading at 1.189 at the time of writing posting gains of .25% since the beginning of the trading session.
Economic sentiment around the Euro has significantly fallen in the wake of the ECB’s decision to extend its current QE programme beyond March 2017, amid concerns that the European elections may throw out further surprises.
Mario Draghi has made the decision to extend the QE programme for 6 months, whilst tapering the monthly injection from €80bn to €60bn, he has also committed to buying further Euro bonds to help stimulate the blocs stagnant inflation.
The news resulted in significant weakness for the Euro, prompting further concerns over the state of the Eurozone economy ahead of next year’s potential political shake up.
The Pound continues to make headway against the Euro during Friday’s session, despite an overwhelming majority of Parliament backing Theresa May’s plans to trigger Article 50 in March.
Markets appear more concerned about the political landscape changing in Europe, which could result in further breakups for the bloc. France, Holland and Italy are edging closer to a far-right political party taking centre stage next year, with Marine le Pen, Geerts Wilders and Beppe Grillo all in support of a Referendum on EU membership.
But the prospect of losing one of its largest members next March will not bode well for the struggling economy, Pound to Euro exchange rates are adjusting to the potential outcomes for both the UK and EU.
Given the recent movements in the Pound’s favour, markets are gauging whether the UK or EU will be worse off as a result of the split, and indicators currently point towards a bumpier ride for the Eurozone economy.
Is the UK heading for a hard Brexit?
Previous hints suggested that Theresa May plans on taking the UK out of the customs union, with her famous rhetoric ‘Brexit means Brexit’, markets remain fearful of the potential implications of a hard Brexit on the UK economy.
With Parliament now behind Theresa May’s plans to trigger Article 50 in March, the Pound’s sentiment could shift once again in the new year, with UK businesses already planning to move operations into central Europe to avoid disruption.
The Pound is arguably overvalued and as such, further adjustments in the near term could present weakness for Sterling.
Current exchange rates
The below table provides GBP/EUR, GBP/USD, GBP/AUD and GBP/CAD exchange rates which are accurate at the time of writing.
|Currency Pair||Current Interbank Exchange Rates|
|To keep track of current interbank exchange rates, please click here|