Since the start of the year it seemed as though GBP/EUR rates wouldn’t stop falling but it now looks as though there could be some light at the end of the tunnel for Euro buyers. This time two weeks ago GBP/EUR rates hit a low of 1.1379 and they are now currently sitting at 1.1810. It seems as though this hike in the exchange rates is in no part down to a stronger pound but more to do with growing uncertainty in the eurozone causing a weakened Euro.
Will these rates continue to rise, in my opinion, I think they have been lucky to get this high. It is no secret that the UK economy is struggling and with the very real possibility of a Triple Dip Recession it could just be a matter of time before these rates head back down. The main market mover at present is without doubt the ongoing issues in Cyprus. Today it has been announced that the banks will remain closed until Thursday with measures being put in to stop a run on the banks.
My personal opinion is that if we see a solution to all of the problems in Cyprus and some stability bought back to the failing eurozone member then we could see these rates head back down towards towards the 1.15-1.16 area. Until this is fully resolved, if it is at all, then I think we will see rates remain fairly stable between 1.1750 and 1.1850.
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