The Pound exchange rate could face some extra volatility in the next few days on Brexit as leaders meet for the European Council summit. Between here and the December summit there’s plenty that could happen to create Sterling movement. Here’s the short-term expected schedule:
6pm: Leaders Arrive for the Meeting
National leaders and the European Council President Donald Tusk will arrive. Comments to any media outlets could create some exchange rate movement. Statements made by UK Prime Minister Theresa May, French President Emmanuel Macron, German Chancellor Angela Merkel, and Donald Tusk will likely be the most influential.
7pm: Theresa May Takes the Stage
At around 7pm, UK PM May will address the EU 27. Her topic of speech is pegged to cover the UK’s assessment of Brexit negotiations so far. May will push EU leaders to agree on a Brexit deal.
7pm Onwards: Working Dinner
After Theresa May’s speech, she’ll leave the other EU leaders to discuss. Between them, they’ll decide how to move forward in negotiations, with recommendations from EU chief negotiator Michel Barnier.
Once the dinner’s over, reports from sources could create market movement. If progress on the Northern Ireland backstop has been made, or if an end date for a temporary customs arrangement is an option, it could appear that a Brexit deal would be close and offer Sterling some support. There have been plenty of reports over the potential for a special November European Council meeting, and if one’s called, the critical issues discussed could be crucial for the Pound’s strength. If a meeting is called to sign off a final deal, the Pound could be supported. If a meeting is called to implement no-deal Brexit contingencies, Sterling may sink.
Thursday 3:30pm: Press Conferences
Press conferences will take place after the meeting, which will include Donald Tusk and Theresa May. This event could be significantly market moving with details about the state of negotiations expected.
Although markets may not want to consider a lack of progress in the coming days, it’s a possibility. If no emergency summit is called in November, the last chance for progress will be the December EU Council meeting.
Ahead of the meeting, the Pound to Euro (GBP/EUR) exchange rate is trading at 1.1383.