Sterling vs the Euro has recently hit 10 week highs with the Interbank level breaking through 1.18 during the course of this week. The Pound has gained against all major currencies and particularly vs the single currency with EUR/USD exchange rates close to their lowest levels in over 10 years.
There are various problems on the continent and with 2016 seemingly the year of anti-establishment with the Brexit vote and recently Donald Trump I think there could be further problems for the single currency caused by political instability in the longer term.
The Italians will be holding a referendum in less than 2 weeks which will look at constitutional reform and with the Italians having had 65 governments since the World War politically this could cause further uncertainty and this could be reflected in the value of the Euro against Sterling.
In France Marine le Pen is looking to run for the French president next year and with 5 months to go this is also another reason why I think the Euro could struggle.
However, the problems facing the UK and therefore Sterling is again being caused by political uncertainty. The recent High Court judgement ruled that Theresa May will need parliamentary approval to invoke Article 50 and the next step will be the government’s challenge in the Supreme Court to try and overrule the verdict made by the High Court. This is due to take place in early December but we may not know the outcome until January.
Turning the focus towards UK economic data we have a number of key data releases to watch out for which could impact GBPEUR exchange rates.
On Wednesday UK Consumer Confidence is published which has rebounded back to pre-Brexit levels recently. Business investment has been apparently resilient to the uncertainty caused by the vote to leave the European Union and this data release is likely to highlight my assumption.
On Thursday PMI manufacturing data for November is due to be released. After the index fell in July it has started to gain supported by a weaker Sterling which has encouraged exports so again I think this data could provide Sterling with further support to send GBPEUR rates in an upwards direction.
Having worked in the foreign exchange markets since 2003 for one of the UK’s leading currency brokers I am confident not only of being able to offer you bank beating exchange rates but also help you with the timing of your trade.
If you’re in the process of selling a property in Europe it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date.
To find out more or for a free quote then please get in touch directly by sending me an email and I look forward to hearing from you.
Tom Holian [email protected]