GBP/EUR Exchange Rate Steady Ahead of Emergency EU Summit
The Pound Euro (GBP/EUR) exchange rate is currently in a holding pattern this morning in the run up to an emergency EU summit later this evening.
At the time of writing the GBP/EUR exchange rate is virtually unchanged from its opening rates this morning, holding at around €1.16.
Pound (GBP) in the Balance as EU to Make Brexit Decision
It looks to be another eventful day for the Pound (GBP) today as the UK currency’s fate hangs in the balance as the EU decides whether or not to grant Theresa May another stay of execution with Brexit.
May has requested a delay until June 30th on hopes that cross-party talks with Labour could produce a working Brexit deal in the coming weeks.
However this is expected to be rejected by the EU, with the most likely outcome being a ‘flexible’ delay of up to a year, which would allow the UK to leave earlier if a deal is ratified.
This is the solution proposed by European Council President Donald Tusk in an effort to avoid more ‘cliff-edge dates’ and is likely to be welcomed by GBP investors.
— Donald Tusk (@eucopresident) April 9, 2019
However another Brexit delay is far from a given, with some countries appearing reluctant to grant the UK with another extension while there is no clear plan from May on how she will break the Brexit deadlock in Parliament.
Such as outcome could be disastrous for the Pound as it would leave the UK on track to crash out of the EU without a deal on Friday.
GBP/EUR Exchange Rate Forecast: Will a Cautious ECB Soften the Euro?
Also potentially impacting the Pound Euro (GBP/EUR) exchange rate will be the European Central Bank’s (ECB) latest rate decision early this afternoon
This may weaken the appeal of the Euro ahead of the EU summit as the ECB is likely to continue to urge caution in the face of slowing growth in the Eurozone.
Rodrigo Catril, Senior FX Strategist at the National Australia Bank suggests:
‘A policy change announcement seems unlikely, but amid recent soft data releases it is hard not to expect anything but a dovish tone from ECB President Mario Draghi at the post meeting press conference.’
However with most investors likely to be preoccupied with the upcoming EU summit, expect any movement in EUR this afternoon to remain fairly limited.