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Pound Euro Exchange Rate May Improve After Possible Brexit Deal

November 23, 2016
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Pound Euro Exchange Rate May Improve After Possible Brexit Deal

 The Brexit has resulted in the weakening of the Pounds in recent times. The Prime Minister Theresa May during her speech said that there will be a Brexit deal that will help to recover the losses. After a small dip, the GBP/EUR exchange rate increased slightly after the speech of the Prime Minister at the annual conference of CBI.

When the British government decided to split from the European Union, it created a lot of uncertainty in the market. Nobody was sure what was going to happen in the market and this caused the Pounds to plummet. May has however remarked that the government will try to arrange and negotiate a Brexit deal for smooth transitioning after splitting from the EU.

This suggests that the UK can remain in the single market for a little longer until the deal is finalized. The Prime Minister in her speech acknowledged that the uncertainty has dragged the value of Pounds in the past few weeks. The investors will be happy that the loss of the single market won’t be so sudden and the UK has taken measures to stabilize the economy.

There is still a threat for the Pounds as the markets get ready for the First Autumn statement from Philip Hammond, UK chancellor. Over the weekend, he hinted that the public finances will be stretched to allow the government to deal with the aftermath of leaving the EU. This means that the 2020 deficit balance policy will be put on hold to increase the government borrowing. This can affect the GBP in a negative way.