Pound/Euro exchange rates have once again pushed close to the 1.15 level bur are we set for a further rise?
Interestingly this is now the fifth time the pound has pushed through the 1.15 barrier in the since May 2017 and each occasion thereafter the pound has corrected and fallen sharply, but will this trend continue?
Will Brexit be delayed?
Rumours have circulated that,. although Theresa May could be close to getting her deal agreed by parliament, it is unlikely she will be able to do this by the 29th March deadline. It would appear concessions could be reached, particularly surrounding the Irish backstop, something that has lead to the pound being the best performing currency this week. However it would appear the market does not believe a deal can be reached by the 29th March with the overriding consensus being a delay of Article 50 by a further three months.
For me I think the above scenario is the most likely and I would be amazed if Theresa May’s Brexit bill is passed in time. May has promised to give parliament a chance to decide what to do about Brexit on Feb. 27 unless she can bring back a deal.
However, some analysts say the short term upside for the pound is likely to be limited as a deeply divided parliament might present significant hurdles for any concessions that May can get out of the European Union. This is something I would completely agree with and I would look for the pound to fall back within the 1.13/14 range. On this basis should you need to secure Euros in the short term then I would suggest that the current level 1.15 is a good buy opportunity.
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