As I have already covered in my Sterling section the EU’s Chief Negotiator Michel Barnier has said that the Brexit deal will not be renegotiated which does not bode well for the UK and therefore the Pound.
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Barnier was speaking at the European Parliament yesterday afternoon and confirmed that the current arrangement is the ‘realistic solution’ in order to avoid having a hard border in Ireland.
One of the main problems for the UK is that the Irish backstop would mean keeping the UK in the EU’s customs union which is what Theresa May is trying to improve on.
The message coming from the European Union is that the terms surrounding the current deal including Ireland will remain in its current state.
The EU has already spent almost two years trying to negotiate the current terms of the Brexit deal and we are getting closer to the 29th March with so much hanging in the balance. As yet the Irish border issue remains the sticking point and if the EU does not budge then where to next?
In the meantime, German inflation data saw a fall to -0.8% month on month in January, but with Brexit dominating headlines this did little to impact Euro exchange rates.
However, one of the biggest events of this month in terms of economic data is Eurozone GDP data due to be released at 10am on Friday morning.
This is the first estimate for the final quarter of 2018, and with Germany experiencing a slowdown to their lowest growth in 6 years could Eurozone GDP data also provide evidence of a slowdown.
Expectations are for growth of just 1.2% so anything lower than expected could see the Euro weaken towards the end of the week.
Therefore, although I expect the ongoing Brexit saga to dominate exchange rates we could see a possible opportunity on Friday morning for anyone looking to send money to Europe at the moment.
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