Will GBPEUR slide below 1.10?

The pound to Euro exchange rate has been bouncing between 1.11 and 1.14 in the last month but lately seems to be on a gentle slide owing to uncertainty over Brexit and the UK government, plus the strengthening Euro. The Eurozone economy was shown to be growing at a very fast pace at 0.6% which has outpaced the US for the year on year at 2.5% versus the US’ 2.3%. Once again it is a case of the Euro rising and the pound weakening, will this continue?

On balance I would expect it probably will, trying to predict the longer term outcome’s are always tricky but we do need to bear in mind the great legal and political challenges ahead for the UK. In my mind these far outweigh what the Eurozone has to go through so ultimately I feel that this see the Euro outperforming the pound.

If you have a transfer buying or selling the pound at present, next week or even in the New Year now is a good time to be making plans. With the all-important UK and Eurozone interest rate decisions out of the way we are now focused on path ahead which will encounter the next developments with Brexit plus the Spanish independence election for Catalonia. Plus 2018 sees the Italian election which will be very closely monitored for signs of anti-EU feelings…

I suspect rates will be trading at fairly similar levels between 1.10 and 1.15 between now and early next year, however any shocks could easily see sterling much lower back below 1.10 again. I would not be ruling this move out and for any clients looking to buy Euros I would be cautiously monitoring the situation for any spikes. If you need to make a transfer and wish to be alerted to any spikes please speak to me Jonathan Watson by emailing jmw@currencies.co.uk with an outline of your position.

Thank you for reading this post and I hope to discuss your situation and the best strategy very soon.

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