This morning the GBP/EUR touched the 1.0904 level putting the rate very close to breaking into a 8 year low and it looks as though the 1.08 level will be reached shortly. The Euro appears to be gaining in strength as Sterling against other currencies is losing ground meaning there is more scope for the market to drop. Mario Draghi the President of the European Central Bank speaks twice this week and is notorious for generating positive movements for the Euro. This in my opinion suggest when he speaks tomorrow the GBP/EUR rate will fall into the 1.08’s.
Sterling has stopped the rot so to speak against other major currencies having moved very little against the Australian Dollar, New Zealand Dollar and Canadian Dollar. This is partly down to the UK Government releasing Brexit white papers which has provided further clarity on the position they’re trying to achieve. The EU are still holding firm that they want to negotiate a divorce bill, citizens rights and the Irish border before they move onto trade. But the more information available in advance the easier its going to be to meet at a deal.
If you’re looking to purchase Euros with Sterling then I would consider acting sooner rather than later as the GBP/EUR looks like it will continue to fall. I would not be shocked to see the rate nearer 1.07 by the end of this week. Draghi has previously talked about bringing a slowdown to the quantitative easing measures, with this process starting as soon as September. Should he suggests this will be the case this week, there could be a instant drop in the rate.
If you do have a question with regards to my forecast please get in touch. When you come to moving large sums of money a movement of a cent can often relate to a significant difference in your returns. Helping you formulate a strategy could make sure you’re in the best position to exchange currency when the market is in your favor, please contact me at [email protected]