GBP/EUR – We have seen Sterling rally overnight following the announcement that Theresa May will be personally taking charge of Brexit negotiations. Although their are many who are not fans of the PM she has received very little support in talks with many involved putting their own agenda ahead of getting a deal in place.
Brussels have also made progress difficult, no doubt seeking to steal the UK’s huge tax income from financial services by forcing them to relocate to Berlin or Paris.
May’s move to take control is welcome and we have now seen GBP/EUR hit 1.1261 this morning. The lack of clarity surrounding Brexit will still hold back the Pound, but at least we may see some progress.
In my opinion it is a wise move from Theresa May, but it will move us closer to a softer Brexit, which although beneficial to the economy it will not be welcomed by Brexiteers. If May fails to make progress within an acceptable time scale the PM could have no one to hide behind which could lead to a leadership challenge. This could cause significant Sterling weakness and is definitely a possibility considering David Davis’ and Boris Johnson’s recent timely departures.
Yesterday saw disappointing services data from the Eurozone which helped the Pound. It will be interesting to see if this is mentioned at the European Central Bank (ECB) meeting on Thursday and whether this will influence growth forecasts and future monetary policy.
If you have to move short term buying Euros I would possibly resist making a rash decision and monitor GBP/EUR to see if we are experiencing new buoyancy levels; with the recent spike GBP/EUR is not too far from 1.13. I’d be happy to assist you with any question you may have about the above, please don’t hesitate to get in touch on 01494 725 353 or be emailing me at email@example.com.