The pound to euro exchange rate reached a three-week high yesterday, with the pound trading just below of the 1.13 handle. It came as trade negotiators fromthe UK and the EU met for a fourth round of post-Brexit negotiations.
The countdown to the June 30 deadline is looming, which marks the latest date at which the Brexit transition period could be extended.
Today, the pound is currently trading at 1.1231 against the euro, according to Bloomberg at the time of writing.
The pound to euro exchange rate opened at the 1.1237 handle.
Michael Brown, Senior Market Analyst at Caxton, spoke to Express.co.uk about the pound to euro exchange rate.
Pound to euro exchange rate: Sterling hit a three-week high yesterday
Pound to euro exchange rate: The pound was trading at a 1.1231 handle according to Bloomberg
He said: “Sterling ticked higher against the common currency on Tuesday, continuing to benefit from the broader risk-on feel, hitting a three-week high just shy of the 1.13 handle.
“Nonetheless, further significant upside for the pound may be unlikely, particularly with a degree of political risk yet to be priced in as we move towards the June 30 deadline for extending the Brexit transition period.”
George Vessey, Currency Strategist at Western Union, commented: “Compromises are expected to be made by the UK this week on fisheries and the level playing field terms set by the EU, in hopes that the two sides can break the current deadlock in negotiations.
“Sterling remains upbeat on the optimistic news, but the main driver of the GBP/USD uplift is the US Dollar’s relentless weakness. GBP/USD jumped to $ 1.2611 this morning, a new one-month high peak.
“Against the Euro, the pound hasn’t been quite so successful, ending the day slightly lower yesterday and mildly on the backfoot this morning.
“The driving force behind the FX market at the moment appears to be the renewed risk appetite rather than dominant sterling strength. However, if a basic trade deal can be agreed in the final round of Brexit talks this week, the pound’s climb will likely extend with $ 1.2710 a major target for traders betting on sterling appreciating.
“The pound will likely be favoured across the board in this instance, with €1.13-€1.14 potentially coming into play versus the Euro.
“GBP volatility is expected to ramp up this week and over this month as crucial Brexit talks continue and key deadlines loom. A statement towards the end of this week will provide near-term guidance and will either scupper or extend sterling’s gains.”
The UK is currently in a transition period having left the European Union.
This period is set to end on December 31, 2020.
It means that new rules will take effect on January 1, 2021.
Pound to euro exchange rate: Some countries are beginning to reopen their borders to tourists
However, with the coronavirus crisis currently ongoing, some have made calls to extend the Brexit transition phase.
Elsewhere in travel news, from June 8, quarantine measures for anyone who arrives to the UK from abroad will be introduced.
The new rules will mean they are forced to self-isolate for 14 days.
There will be some exceptions for those who arrive from the Common Travel Area – meaning the Republic of Ireland, the Channel Islands, and the Isle of Man.
Meanwhile, some European countries have begun to open their borders to tourists once again.
This includes Italy where, as of today, travellers from most European countries are now allowed to enter the country without quarantine.
The country is also lifting restrictions on domestic travel, allowing people to move between different regions.
Flavio Zappacosta, manager for UK and Ireland at the Italian Tourist Board, highlighted the importance of tourism in Italy’s economy.
“The tourism industry is one of Italy’s key economy drivers so it is with utmost importance that we open for business as soon as it is safe to do so.
“We know how popular Italy is for Brits and hope we can inspire them to start to plan and book an Italian holiday this year.”