The pound has been dramatically rising against the Euro on the back of expectations that the UK will raise interest rates before February of next year. Investors have piled into the pound taking up speculative positions on a belief that the British pound will be worth more in the future. The pessimist in me would point out that we have not seen any interest rate hikes in the UK in ten years and whilst there is more evidence at present for a hike, ultimately I don’t think this is very likely and sterling will fall back.
Looking at the Euro, the weakness we are seeing is the result of the German elections which has seen Angela Merkel losing support and the far-right gaining support. This is putting real pressure on the Euro which has weakened and I believe it will weaken further in the future. I expect to see GBPEUR lose value up to 1.12 before rising back to potentially 1.16 in the coming weeks.
Overall there is a feeling the pound will rise further and whilst I am of the opinion it will fall back quickly, there is more than likely a chance that the ultimate move will be lower. If you have a transfer buying Euros with the pound it is looking like it will continue to be a very expensive transfer as the pound struggle to shake off the Brexit worries.
If you are looking to make a transfer in the future then making sure you have all the relevant information on the rate is crucial to getting the best deals. For more information at no cost or obligation please speak to me Jonathan Watson by emailing [email protected].
Thank you for reading and I look forward to hearing from you.