Sterling remains ‘rangebound’ as post-Brexit trade talks continue to hang in the balance

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Post-Brexit trade talks have been extended with chief negotiators for the UK and EU continuing to hash out key talking points until Wednesday. More talks are expected to take place in Brussels from Thursday, according to the BBC. Fishing rights and competition rules are understood to be the main sticking points.

Brexit uncertainty has also had an impact on the pound to euro exchange rate in recent months.

The pound is currently trading at 1.1014 against the euro, according to Bloomberg at the time of writing.

This is above yesterday’s rate of 1.0987 which was below the 1.10 handle.

Michael Brown, currency expert at Caxton FX, spoke to Express.co.uk regarding the latest exchange rate figures.

He said: “Sterling remained rangebound against the common currency yesterday with the market continuing to wait for the latest news on post-Brexit trade talks, and largely ignoring the broader souring in risk appetite.

“A similar theme will likely dominate today.”

The UK left the EU on January 31 but has been in a transition period since then.

The transition period is due to end on December 31 where either a trade deal will be in place or the UK will trade with the EU on World Trade Organisation rules.

George Vessey, a UK Currency Strategist at Western Union Business Solutions said a trade deal should “boost” sterling.

He said: “The British Pound is being weighed down by global risk aversion, despite growing optimism of a UK-EU trade deal – a scenario that should help boost sterling’s value.

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“GBP/USD dropped under $1.30 for the first time in a week and GBP/EUR appears vulnerable under the €1.10 handle.

“Deal or no deal, Brexit presents another big challenge for UK businesses as preparation ramps up ahead of the end of the transition period.

“The UK has experienced its worst recession in over 300 years this year, plagued by the negative impact of the pandemic.”

Mr Vessey explained that as well as the coronavirus pandemic, Brexit could potentially worsen the economic blow.

He added: “Leaving the EU was always going to be major hurdle for international trade and a weight hanging on the pound’s value.

“Disruption to trade was always expected after Brexit, and even with a trade deal, companies were always going to face a plethora of barriers to trade with the world’s biggest trading bloc.

“For this reason, the upside risk to sterling is likely outweighed by the downside risk if a trade deal isn’t secured in time.

“Negotiations continue this week, and a deadline of mid-November has been agreed by both sides in order to give enough time to ratify a deal before year end.”

So what does that mean for travel money?

The Post Office is currently offering a reasonable pound to euro exchange rate.

The company is offering a rate of 1.0583 for amounts over £400, 1.0736 for amounts over £500 and 1.0791 for amounts over £1,000.

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