Pound to euro exchange rate: Sterling could ‘tumble’ if Boris sours Brexit talks – expert | Travel News | Travel
Yesterday, the UK’s deadline for reaching a Brexit agreement passed without a there being a deal in place. Now, it’s down to Prime Minister Boris Johnson to set out whether trade talks with the EU will continue or come to an end. Mr Johnson will be setting out his response today, according to the UK’s chief negotiator Lord Frost.
Last month, the Prime Minister said that if there was no deal in place by October 15 then both sides should walk away and prepare for a no deal outcome.
The transition period will end on December 31 2020 when the UK will drop out of the EU’s main trading arrangement.
Brexit talks and negotiations have heavily impacted the pound in recent weeks, leading to dips and small surges in line with the success of the trade talks.
The pound is currently trading at 1.1017 against the euro, according to Bloomberg at the time of writing.
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“It is widely expected that negotiations will continue, providing a boost to the quid; though if Boris decides to crash the talks now, sterling will tumble.”
Currency strategist at Western Union, George Vessey also agreed that GBP has been particularly sensitive to Brexit news.
He said: “The British Pound has been more sensitive to Brexit-related news recently and its U-turn this week came after pessimism from both sides in relation to the progress made in trade negotiations.
“No-deal fears crept higher and sterling fell lower across the board, falling one percent against the US Dollar on the day and losing grip of the $1.30 and €1.10 support levels against the dollar and Euro respectively.”
The key factors behind the EU and UK not reaching an agreement are fisheries, level playing field issues and governance, according to Mr Vessey.
Mr Vessey continued: “The realisation that a deal this week was unlikely gave investors a scare, especially because of Mr Johnson’s self-imposed deadline.”
“A no-trade deal scenario is still possible and GBP downside risk is potentially under-priced,” he added.
He added: GBP/EUR could fall back towards €1.07.”
What does that mean for your travel money?
The Post Office is currently offering a rate of 1.0661 for amounts over £400 and 1.0871 for amounts over £1,000.
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