The big news on the pound to Euro rate will be the likelihood of the a strong election victory for Theresa May. This was being priced in as soon as the election was announced back in April when sterling rose against the Euro. We then saw GBPEUR rise even further to almost 1.20 on the potential of a Le Pen victory but all was not to be realised and since then the rate has been on a steady decline. I am now being asked by clients buying Euros when will rates go back to 1.20? Well as we have written extensively on this website any challenges to 1.20 are highly likely to ultimately prove unsuccessful as market concerns over the Brexit remain. If you have a transfer buying or selling Euros the next few weeks will be critical to getting the best rate and managing the timing is essential.
Looking at the Euro, it is much stronger in the last few weeks as we find the latest political uncertainty is removed and attention switches back to the positive news. The Eurozone economy is performing much better and there is talk of the QE (Quantitative Easing) that has been in place being discontinued. QE is essentially providing extra funding to banks which stimulates the economy and weakens the economy. Conversely the removal of this measure will see the Euro stronger.
If you are buying Euros with pounds it might be tempting to hang on waiting for the pound to rise further against the Euro. Expecting the pound to just rise dramatically after the election could be a very risky strategy. The pound is already faring well against most currencies but the euro is stronger. Just waiting for improvements could end up being a very costly mistake which many clients buying currency can easily fall into.
For more information at no cost or obligation please speak to me Jonathan Watson by emailing [email protected] with an outline of your position and any information to help us assess your position.
Thank you for reading and I look forward to hearing from you.