The Pound’s roller coaster ride has continued today, with GBP/EUR recovering back up to €1.17, 2 cents up on yesterday’s lows. Part of the reason is a weaker Euro. The single currency has lost value partly due to poor data from the bloc early in the day. Concerns about the global economy has also pushed investors in to safe havens, weakening other currencies like the Euro and making them cheaper to purchase.
Why has the Pound gone back up?
The main reasons for the rise in Sterling, is the ongoing Brexit saga. As EU leaders have moved the cliff edge of a Hard Brexit into April, the Prime Minister has a few weeks to try and sort out the issue of an orderly withdrawal from the EU.
The EU have agreed to a short Brexit delay, to try and help her get the deal through, which could happen next week. If so, Brexit will be delayed until March to get the necessary legislation through parliament. If the deal is voted down for a third time, then there are few other options. Revoking article 50 is one, albeit unlikely. Another is a long delay to Brexit, which could lead to a general election or 2nd referendum. Markets have pushed the Pound higher on this news.
We await news on when May plans to bring the deal back, and if the ERG and DUP can hold their noses while agreeing to it.
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