During the European Union’s Summit, which takes place over the next few days they are expected to approve the Brexit transitional deal that has been negotiated over the last few months. All of the nations within the Bloc will get to vote on the deal and should that be approved the transitional process will be formalised once we move past the March 2019 deadline. The countries are expected to vote yes as the terms negotiated were done so with their input in the first place.
Should the vote go through I think the Euro could be set to lose as the UK is one of their main trading partner, a lot of businesses based in the UK will be able to remain and in theory this should lead to a good trade deal further down the line – or at least extend the period in which a trade deal can be negotiated. There was a concern that many major businesses who trade in the EU may have to move to the Bloc however a trade deal could keep them set in the UK. This will also give the UK more time to agree trade deals with other nations while the transition period is in force.
EU rights are also set to remain the same for the next few years which means anyone moving around the EU up until the end of the transition period will receive the same rights as the do currently. This again creates some stability and certainty for UK and EU workers or expats who are based overseas.
Economic Data Released Today
This morning the latest Markit Services and Manufacturing Purchasing Managers Index data was released and all fell short of the expected level. Through the end of last year business confidence, which is what the PMI data indicates, was at record high levels however over the last few months it has started to fall away. Should this continue and the attitude of business executives across the continent continues to decrease, there could be questions asked with regards to the Euro’s future performance. At the moment there is a real argument that Euro weakness could be close.