Pound to euro exchange rate – sterling still up against the European single currency amid strong economic performance since Brexit
The pound continues to perform stronger-than-expected since the Brexit vote in 2016 due in part to Britain's healthy economy
THE pounds was still up slightly against the euro carrying on a steady upward trend since September 2017.
Sterling was up by 0.13% trading at 1.1350 at around 09:30am today against the European single currency.
The euro has gained broadly in recent days on expectations the European Central Bank would soon move to rein in monetary policy.
"The talks about the transition period are due to start in late January, the negotiations on future trade relations following an EU summit at the end of March.
Until a reversal of the plans is in sight EUR-GBP will continue to trade in a narrow range," Commerzbank analysts wrote in a note.
The pound has in recent days reached its highest levels since the Brexit vote in June 2016, with the better-than-expected economic performance of the British economy.
Hopes that Britain will soon agree a transition deal with Brussels supporting sterling have also contributed to the currency’s strong performance.
"I expect the political noise to move the pound on a short-term basis.
“But will it change the overall direction of the last 12 months? I don't think so," said Michael Hewson, chief analyst at CMC Markets, who remains bullish on the pound.
Hewson said the only event that could send sterling sharply lower was if talks with the EU broke down completely, which he said did not look likely as Brussels looked more amenable to negotiating with Britain.
The president of the EU Commission, Jean-Claude Juncker, said on Thursday Britain was welcome to rejoin the trading bloc after it has left next year.
Towards the end of last year, sterling enjoyed a slight surge as the first phase of the Brexit talks were concluded.
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With the value of currency so closely linked to the outcome of the UK’s departure talks, all eyes will remain firmly fixed on the remaining Brussels negotiations – with the toughest part, the trade talks, still to come.
Both the UK and the EU’s remaining 27 member states will face “substantial losses” without a deal on Brexit, according to a recent report.
Europe would be clobbered by 1.2million job losses if no agreement were reached, while Britain would take a 4.5 per cent hit to GDP, according to the Centre for Economic Policy Research.
What has happened to the euro conversion rate in the last few months?
Sterling is down around 13 per cent against the euro and 11 per cent against the dollar compared with before the EU Referendum of June 2016.
For investors, a rate hike is good news, as it means the pound gains more value while it’s sat in buyers’ bank accounts.
A rise in interest rates can also reflect an increase in general economic confidence, which will increase sterling’s relative value on financial markets.
Where is the best place to get euros?
Euros can be bought at supermarkets, the Post Office and currency specialists – but rates vary massively.
The best rates can often be found at specialist online outlets, such as Travelex, which will deliver your cash directly to your home.