Only a few weeks ago GBPEUR was poised to break 1.20 as markets believed a strong performance in the UK election by Theresa May would help bolster confidence around the UK and the outlook on Brexit. This was in principal down to the belief that greater support for Theresa May’s vision would be well received by markets smoothing the transition over the rocky Brexit road. Well for anyone buying a foreign currency with the pound the market reaction shows we just shouldn’t take too much for granted in this circumstance and that we need to always prepare for the unexpected. For clients buying sterling with Euros however this is an unexpected gift and you should be monitoring the market very carefully.
Overall the market is now much improved for clients buying pounds with Euros and I think this is an opportunity well worth capitalising on. Future predictions for the rates are of course difficult but with the market now pricing in much of the uncertainty could it be that the pound struggles to fall lower?
Markets had refreshed their views on the pound but now we have backtracked and the market is I believe pricing in much of the uncertainty. Key information this week will be the UK Bank of England decision on Thursday, how will this election have influenced the Bank of England? How will they now view Brexit?
This election has thrown up lots of fresh questions over the outlook on the UK political situation and with Brexit the main issue, of course sterling might fall lower. I am trying to say it won’t. But I do feel the market is pricing in lots of weakness already and with fresh news over what actually is happening the pound might well rally quickly.
We saw this last year and earlier this year when sterling had dipped, all of sudden we were presented with some fresh news and the pound rose. If you are selling a foreign currency to buy pounds this is an opportunity that might not be around as long as the headlines suggest!
This week could see some further improvements so if you would like any assistance with the timing or planning of any currency exchange please speak to me Jonathan Watson by emailing firstname.lastname@example.org. With many year’s experience in such matters I am very confident I can offer a rate that will save you money over other option and some useful insight.
Thank you for reading and I look forward to hearing from you.