GBP/EUR – Where Next? (Daniel Johnson)

Brexit phase two could cause prolonged Sterling weakness

The main driver on GBP/EUR at present is Brexit. There is still a great deal of uncertainty surrounding how Brexit talks will progress. GBP/EUR hit 1.15 recently following the announcement a deal had been agreed in regards to Irish borders. The small window of opportunity for euro buyers soon closed however following stupid comments from David Davis. Davis, the secretary of state for exiting the European Union, he thought it would be a bright idea to state the border deal was not legally binding.  The pound fell in value as a result.

There was then the eleven tory MPs who managed to win a vote that any deal agreed by Theresa May at the recent European summit would have to be given the ok by parliament, substantially weakening May’s position and again sterling fell.

Phase two of negotiations is set to be far more difficult than phase one. The important issues such as immigration and trade are set to be addressed. Negotiations are expected to be problematic and lengthy. At present GBP/EUR seems range bound between 1.10-1.15

Potential Opportunity for Euro Buyers

Tomorrow Spanish regional elections will commence. There are several parties that are in favour of Catalonian independence. If it looks like Catalonia will leave Spain and indeed the EU the euro could suffer. Although Catalonia makes up a significant amount of Spanish GDP it is the threat that other regions could follow suit and leave the EU that is the threat to the Euro.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker when the market is currently so hard to predict. If you let me know the details of your trade I will endeavour to produce a free trading strategy to suit your individual needs. Have faith knowing you will be dealing with a brokerage in business for over 16yrs, Foreign Currency Direct Plc. We are a no risk entity as we do not speculate on the market and we are registered with the FCA. If you have a currency provider take a minute to send over the rates they offer and I am confident I can demonstrate a significant saving. I can be contacted at dcj@currencies.co.uk . (Daniel Johnson) Thank you for reading.

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