EUR/GBP Exchange Rate Subdued amid Renewed Brexit Uncertainty
The Euro Pound (EUR/GBP) exchange rate is stuck in a narrow range this morning in light of recent Brexit developments.
At the time of writing EUR/GBP exchange rate is almost unchanged from this morning’s opening levels, leaving the pairing trading at around £0.8648.
Pound (GBP) In the Balance as UK Faces another Brexit Delay
Renewed Brexit uncertainty is threatening to inject fresh volatility into the Pound (GBP) in the coming days, as EU leaders consider whether to grant another Brexit extension.
Hopes for the UK to ratify a deal agreed with the EU last week in time for the current deadline of 31 October were dashed on Tuesday.
This came as Boris Johnson ‘paused’ his Withdrawal Agreement Bill, after MP’s rejected his timetable to fast-track his through parliament by the end of the week.
The ball now appears to be back in the EU’s court on whether to offer another delay in order to avoid a damaging no-deal Brexit.
Johnson was compelled to write a letter to the EU requesting a three-month extension to the Brexit deadline after he failed to secure support for his Brexit deal on Saturday.
Following the vote EU Council President Donald Tusk, said he would ‘recommend the EU27 accept the UK request for an extension’.
Johnson has subsequently stated that he will seek an immediate election if Brexit is delayed until next year, the prospect of which is unlikely to fill GBP investors with joy.
Former Conservative deputy Prime Minister. Michael Heseltine suggests the Tories are unlikely to win an outright majority in an election, an outcome will do little to provide clarity:
‘The issue is can the Brexit aspect of the Tory party peel off enough Labour votes, enough Labour marginal constituencies, to counter the number that the Tories are going to lose.
‘My own guess is that a general election will be a re-run of what we have today – another period of uncertainty.’
Gloomy Eurozone Confidence Figures to Weigh on the Euro (EUR) Ahead of ECB Meeting
Meanwhile away from Brexit, the Euro (EUR) may face some pressure later this afternoon with the publication of the Eurozone’s latest consumer confidence survey.
Economists forecast household sentiment will have deteriorated again in October, with concerns of slowing economy likely to result in a gloomier outlook from consumers.
Such a dour outlook may be shared by the European Central Bank (ECB) on Thursday when it concludes its October policy meeting, with the single currency likely to face pressure if the bank warns of downside risks still facing the EUrozone.