The pound continues to be impacted by Brexit developments this week as the UK’s divorce from the EU serves as a barometer for GBP’s movements. As the crunch week gets underway, leaders are expected tomorrow to grant an extension to Article 50. This could help buoy the pound to euro exchange rate, experts have said. The pound is currently trading at €1.161 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.
“With the UK’s deadline for exiting the EU fast approaching (once again) the pound has been left in a state of flux,” said Parsons.
“At the moment it looks as though the UK will receive another extension to avoid crashing out without a deal on Friday.
“But there are no certainties at this stage and this week is likely to be another volatile one for GBP.”
Michael Brown, senior analyst at Caxton FX, added: “Sterling remains relatively well-supported ahead of another crunch week for Brexit, with focus falling on this Wednesday’s EU summit where leaders are expected to grant the UK a further extension to Article 50, possibly as long as 12 months.
“The granting of an extension may support the pound due to the avoidance of an imminent no-deal exit, however, the deadlock in Westminster over the way forward is likely to cap any rallies unless cross-party talks are more fruitful this week.”
On Sunday, Prime Minister Theresa May tweeted a video message explaining her reasons for negotiating with the opposition.
In the video, Theresa May, sitting on a sofa and displaying a relaxed informal manner, said: “We absolutely must leave the European Union […] that means we need to get a deal over the line and that’s why we’ve been looking for new ways – a new approach – to find an agreement in Parliament.”
Data from the eurozone yesterday revealed that both German imports and exports fell much more than forecast, revealing worrying cracks in the foundations of the Eurozone’s largest economy.
Commenting on the data, Carsten Brzeski, Chief Economist at ING Germany said: “The export sector had been on a rollercoaster ride through all of 2018, with problems in emerging markets, trade tensions between the US and China, US protectionism, a possible cooling of the Chinese economy and increasing fears of a hard Brexit.
“There simply seem to be too many crises in global trade for the German export sector to defy all of them at the same time.”
Looking at today, it is likely that sterling may slide against the euro following the release of the UK like-for-like retail sales figures.
If sales follow February’s lead and contract in March, sentiment in the pound is likely to be dampened.
Ian Strafford-Taylor, CEO of currency expert, FairFX, has advised holidaymakers: “As we’ve said time and time again, uncertainty is one of the biggest causes of volatility for the pound, and with so little clarity over Brexit at the moment the pound is more vulnerable than ever.
“As families prepare for their Easter getaway, a question we’ve been asked a lot is when to buy holiday money. 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.”