The GBPEUR exchange rate has been sliding ever since the UK election result and quite frankly there has been very little on offer to help any Euro buyers, the only news to help was the prospect of the UK raising interest rates. This has now been firmly quashed by the Bank of England and the only thing really for Euro buyers to look forward to is something unexpected. If you need to buy Euros with pounds I think you need to be carefully analysing your situation to work out what will suit you best.
Tomorrow is a host of very important UK data including the latest Industrial and Manufacturing data which will be released around 09.30 am. There is also Trade Balance data due at this time, the overall impression is these releases could lightly help the pound since the weaker pound does actually help these areas of the economy. However overall it is almost clutching at straws for Euro buyers to expect anything dramatic here and it would not be too surprising to see the rate lower.
With Euro buyers lucky to be getting rates above 1.10 the prospect of lower levels is high. A continuing strengthening of the Eurozone economy plus continued political certainty in the Eurozone paints a fairly positive picture for the Eurozone in the coming weeks and months. The German election looks like it will only further support the Euro, Merkel is well ahead in the polls and there more right wing elements in German politics are not getting anywhere near the support to mount a serious worrying challenge for the Euro.
All in all any clients looking to buy Euros should be making some serious plans as their position could easily get worse. The only reason GBPEUR is a little better for Euro buyers today is the the threat of nuclear war! This has strengthened the US dollar and pulled EURUSD down which has softened the Euro against the pound.
It is a mark of how tough times are for Euro buyers that a North Korean nuclear war is the only reason to be positive today.
For more information at no cost or obligation please speak to me Jonathan Watson by emailing [email protected].