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Pound to euro exchange rate: Sterling holds onto 'previous gains' as Brexit optimism grows | Travel News | Travel
Published On: Thu, Oct 11th, 2018

Pound to euro exchange rate: Sterling holds onto ‘previous gains’ as Brexit optimism grows | Travel News | Travel

The pound has retained the high levels its been trading at all week and creeped up even further.

The growth comes despite new UK construction and manufacturing production data proving disappointing.

Optimism regarding a Brexit deal should serve to keep the pound buoyant, said experts.

The pound is currently trading at €1.144 against the euro, according to Bloomberg

Laura Parsons, currency analyst at TorFX, spoke to regarding the latest exchange rate figures.

“The GBP/EUR exchange rate managed to hold previous gains on Wednesday and continued trading in the region of €1.144 despite disappointing construction and manufacturing production data for the UK.

“Although UK data is in short supply tomorrow, ongoing optimism that the UK is close to reaching a Brexit deal could keep Sterling supported against the common currency as we head towards the weekend.”

Market confidence has already increased as European Commission President Jean-Claude Juncker hinted the chances of a good deal have grown, as did the Irish Deputy Prime Minister, Simon Coveney.

Coveney revealed on Sunday a Brexit deal is “90 per cent” completed “in terms of text” and should be finalised in the coming weeks.

But Kengo Suzuki, chief FX strategist at Mizuho Securities cautioned: “We can’t be too optimistic about the Brexit process.

“Even if a deal can be struck at an anticipated special EU summit in November, it has to get through the British Parliament.”

However, there has been a mixed outlook from the International Monetary Fund (IMF) which has served to lower trader confidence.

IMF officials have cautioned slow Brexit progress could damage UK and Eurozone economic growth.

The report read: “The possible failure of Brexit negotiations poses another risk.

“An intensification of trade tensions and the associated further rise in policy uncertainty could dent business and financial market sentiment, trigger financial market volatility, and slow investment and trade.”

The next major Eurozone data to watch out for will be Thursday’s release of European Central Bank (ECB) meeting accounts.

If these accounts show that European Central Bank (ECB) policymakers could be planning to raise interest rates next year then the euro could rally against the pound.

Holidaymakers looking to escape the cold should think of heading to Turkey – the pound is strong against the Turkish lira meaning holidays to Turkey can be grabbed for a bargain

Pressure on the lira saw inflation rates rise to nearly 25 per cent in September, marking the highest levels since President Erdogan came to power 15 years ago.

The most recent strain on the lira came after US sanctions were imposed over an American pastor, who is being held in Turkey for nearly two years over espionage and terrorism-related charges.

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Pound to euro exchange rate: Sterling holds onto ‘previous gains’ as Brexit optimism grows | Travel News | Travel