After a bad week for sterling exchange rates the pound has tumbled further against the Euro after the third round of Brexit negotiations ended badly yesterday. There appears to be a lack of agreement between the British exit bill and any potential future trade relationship whilst the EU are not willing to discuss the latter until “sufficient progress” has been made on the divorce settlement. The lack of certainty is now causing concerns for businesses and individuals and this is reflecting in the weaker price of sterling. GBP EUR is currently sitting between 1.08 & 1.09.
A stalemate has come about between the British and EU sides in this negotiation and the problem for the pound is that the negotiations don’t recommence until mid-September which leaves us with a couple of weeks in this uncertain period. Those clients looking to sell Euros could see some even better opportunities in these next few weeks although my long term view is that he pound should rally.
With no UK interest rate rises from the Bank of England in the offing this too is another factor why the pound should remain under pressure. Although there were some noises by one member of the Monetary Policy Committee, Michael Saunders to consider moving sooner to beat rising inflation it will not probably be enough to persuade the other members especially with all the Brexit uncertainty.
The EU meanwhile is looking to taper its asset purchasing scheme possibly as soon as September which should help strengthen the Euro further. Those clients looking to buy Euros would be wise to consider moving sooner rather than later as the idea of parity could very easily become a reality.
If you would like further information on sterling or Euro exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]