GBP EUR Falls to Near 8 Year Low

The pound continues to remain on the back foot as we end a week where Brexit uncertainties have largely hampered the pound. GBP EUR has fallen to a near 8 year low this week although the pound has found a degree of support as we approach the Bank Holiday weekend. Next week could bring new opportunities as politics start coming back in to full force and with the Brexit negotiations recommencing. Any positive dialogue between Britain and the EU could see an improvement in the pounds fortunes although I wouldn’t hold your breath just yet. To date EU negotiatior Michel Barnier has reinforced his view that the divorce bill must be established before any future trade deal can be discussed which isn’t boding well for the pound.

The Jackson Hole Symposium will be concluded today and speeches from European Central Bank President Mario Draghi and US Federal Reserve Chair Janet Yellen are widely tipped to create market volatility for the Euro, pound and US dollar in particular. Any mention of Mario Draghi tapering the asset purchasing scheme could see additional strength for the Euro although much of this should be priced into the market by now.

Another volatile period also awaits any clients with a requirement to buy Euros or sell Euro. The German election in September could see a period of volatility with some weakness for the Euro be expected as the election looms. However it is highly likely that that German Chancellor Angela Merkel will end up serving a fourth term which could bring about additional gains for the single currency.

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