Currency traders reacted with indifference to the overnight announcement of an extension to the Brexit deadline to the end of October.

There was a marginal gain in the pound against peer currencies in advance of the announcement, but it remained well within its recent trading range.

Lee Evans, Head of FX Trading and Strategy with Bank of Ireland, said the granting of an extension had already been priced in.

The uncertainty that existed was around the timing.

"Sterling has moved from 91 pence (against the euro) to 85 pence since the start of the year. To push sterling on, we need some certainty - either a deal or clarity around a soft Brexit or no Brexit at all."

He pointed out that 2018 had seen the tightest trading range in the pound-euro rate since before the financial crisis.


"We were looking at more volatility for 2019 and it took just 23 days for that to happen. It's going to be a recurring theme for 2019 and we've told customers to look out for that."

Another event that failed to make a major dent in currency markets was the announcement by the European Central Bank that interest rates would stay at zero until at least the end of the year.

ECB President Mario Draghi said the temporary factors that are slowing the euro zone recovery are lasting longer than expected.

"We've seen pricing change since the start of the year. Markets had been pricing in a rate increase towards the end of the year. That's been pushed out now," Lee Evans explained. 

"It's important to note, though, that the first quarter is generally the weakest and that pricing can change again. It's a case of delayed rather than derailed," he said, adding that the ECB chief had indicated that if the data does pick up, there may not be a need for the extra stimulus from monetary policy.

Borrowers can rest assured that lending rates will remain at their current levels for the remainder of 2019. But 2020 could be a different story.