Pound to euro exchange rate: Sterling falters following customs union disagreements
THE POUND has been affected by the current indecision following the UK staying in the customs union after the country leaves the EU next year. It has faltered against the euro as the markets open
The pound has dropped against the euro following a strong end to the week.
Currently trading at €1.136, the exchange rate closed on Friday at €1.142 after making a number of gains throughout the week.
Threats of indecision over the customs union outcome indecision have hindered the growth of the pound.
This also follows rumours of a number of cabinet members who would reject a customs union between the UK and the EU.
The pound faltered on Friday as PM Theresa May pushed back against suggestions the UK will remain in an indefinite customs union with the EU
Laura Parsons, currency analyst at TorFx, explained how the pound could have moved since the weekend.
She told Express.co.uk: “The pound faltered on Friday as PM Theresa May pushed back against suggestions the UK will remain in an indefinite customs union with the EU.
“The news sent GBP/EUR below €1.140 and left Sterling weaker against the other majors.”
Theresa May will not push for an “end date” for the UK staying in the customs union for the EU.
As many as nine cabinet members are thought to be opposed to the new plans.
The fears are due to the prospect of being unable to sign trade deals if staying in an indefinite deal.
It could also cause problems for the prospect of a hard Irish border, something the prime minister is hoping to avoid.
EU negotiator Michel Barnier has warned the Irish border problem is holding up a UK deal.
Protecting the open border, known as the “backstop” by government officials, is something Theresa May is hoping to reach an agreement about before March 2019.
The UK is to leave the EU next year, with a transition period to follow until December 2020.
Ms Parsons explained how the pound could potentially pick up later this week.
She said: “While Brexit will remain in the spotlight this week, there are a plethora of high-profile UK reports to contend with too, including employment, retail sales and inflation.
“If these stats impress it’s possible that the pound will return to its recent highs.”
The latest retail sales failed to be as strong as previous months, with September seeing growth of 0.7 per cent, compared to 2.3 per cent the previous year.
July and August saw strong retail sales thanks to the summer including the World Cup and the heatwave.