Sterling appears to have held the gains made against the Euro on Wednesday and the question is could there be more rises? Yesterday the third round of Brexit talks took place and it appears the UK negotiating team have gone onto the front foot claiming that the EU figures are fantasy and they wont be blackmailed. International Trade Secretary Liam Fox has suggested that international businesses are becoming frustrated with the lack of focus on a trade deal with the EU so committed on the “Brexit Bill” figure.
Now that there seems to be external pressure we may see a focus move towards the trade deal outcomes, which could change the fate of Sterling at the moment. The uncertainty surrounding Brexit is having a major impact on Sterling and this is exaggerated by the strength currently seen for the Euro. There has been overwhelming encouragement for the Euro in the last few weeks with strong economic data and a optimism that the ECB may taper back the current stimulus measures.
Next week the European Central Bank will provide their latest interest rate decision and more importantly Mario Draghi will speak. The President of the ECB is known for causing the GBP/EUR rate to drop and next week depending on what he says it could move either way. Last week at a speech he confirmed he liked the current stimulus and the recent strength for the Eurozone could be put down to that, therefore he may continue with the current measures.
I think a movement back towards 1.10 is possible in the next few weeks especially if Brexit talks appear to be progressing positively. What the latest developments do suggest in my opinion is that if you’re looking to sell Euros now might be the time to act.
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]