The pound has improved against the euro but could be set to ‘fluctuate’ today, experts have said. MPs will vote on a range of Brexit options later today, giving Parliament a chance to indicate whether it can agree on a deal with closer ties to the European Union. GBP’s boost was noted yesterday after arch-Eurosceptic Jacob Rees-Mogg hinted he might now be forced to back Theresa May’s deal if the alternative was no Brexit at all. Any indications that a no-deal Brexit could be taken off the table could prove pound-positive.
The pound is currently trading at €1.171 against the euro, according to Bloomberg at the time of writing.
Laura Parsons, currency analyst at TorFX, spoke to Express.co.uk regarding the latest exchange rate figures.
“The GBP/EUR exchange rate returned to trending above €1.170 on Wednesday despite ongoing uncertainty about the path of Brexit and the future of PM Theresa May,” said Parsons.
“As the day continues GBP/EUR could fluctuate in response to the UK’s latest reported sales data and a speech from ECB President Mario Draghi.
“While UK data is unlikely to have much of an impact with Brexit so much in focus, a dovish speech from Draghi could weaken the euro.”
May’s Brexit strategy was in tatters this week after MPs voted to take control of the process from the hands of ministers and three pro-EU ministers quit the Government.
In a fresh blow for the Prime Minister, the Government was defeated by the passing of cross-party amendment by 392 to 302 – a majority of 27.
Business minister Richard Harrington, who resigned along with Middle East minister Alistair Burt and health minister Steve Brine, said the Government was “playing roulette” with peoples’ lives and livelihoods in its handling of Brexit.
Hamish Muress, currency analyst at OFX, said: “For a long time, the pound has been trading on thin ice and that ice is beginning to crack.
“Even though the Brexit date has been pushed beyond the end of March, in the eyes of investors there is still a risk that the UK could crash out of the EU in an accidental ‘no-deal’ Brexit scenario.
“If this were to happen, the Pound could certainly drop through the barrier of 1.30 against the Dollar.
“This week, all eyes will be watching out for the ‘indicative votes’ planned throughout the week, though a number of these still won’t address the withdrawal agreement or the issue of the Irish backstop.
“For the pound, immediate relief will only be provided if the Prime Minister’s deal is passed, which is still looking unlikely. There remain several hurdles for May to jump.
“Perhaps the only hope for Theresa May will come in the failure of all other ‘indicative votes’ as MPs struggle to gain a majority. If this is the case, and the impasse continues, pressure will mount on MPs who may once again look to the withdrawal agreement or a watered-down version of it.
“As things stand, the closer to any Brexit deadline we get, the more uncertainty there is for sterling, and this is coupled with the fact that as the clock ticks down, the Prime Minister’s deal May still be better than a No Deal.”
Ian Strafford-Taylor, CEO of currency expert, FairFX added: “The best thing holidaymakers can do is keep an eye on how the pound reacts this week, and lock-in rates to a prepaid card when you’re happy with the rate on offer as this is the only way to safeguard yourself from further fluctuations.
“If you haven’t booked a holiday yet this year it’s worth considering destinations where the pound is performing well if you want to see your money go further. Looking at destinations outside of the eurozone could be the key to getting more for your money.”
Today, the Post Office is offering a euro rate of €1.1352 for over £400 and a rate of €1.1481 for over £1,000.
This week the European Commission announced the changes to travel in its completed emergency plan. They warned of “significant disruption” if there is a no-deal Brexit scenario.
