GBPEUR exchange rates have experienced a fairly volatile week due to Brexit announcements, however the Pound has finished the week on a high against the Euro.
The EU’s chief negotiator Michel Barnier tone seemed fairly positive at lunchtime when he addressed the press about Brexit. He explained that there were positive elements of the Chequers plan but the concept of the UK having there own rules in regards to change was still the sticking point. He also went on to say that he would be open to other backstops for the Irish border, which shows that the EU are trying to secure a deal with the UK.
Looking further ahead I believe GBPEUR will fluctuate between 1.09-1.1250, however the closer we get to the EU summit in October, I expect exchange rates to be at the lower end. For clients that are buying Euros short term, quite simply I would look to buy on the back of positive market movement.
As for Euro sellers, I expect further opportunity in the months to come, however at some point this year the likelihood in my opinion is that the UK will secure a deal with the EU and therefore the Pound will strengthen dramatically against the Euro. My forecast for the end of the year is for the Pound to be trading at 1.16-1.18 against the Euro.
For clients converting GBPEUR next week, the UK are set to release their latest GDP numbers and a small rise is expected. If this is the case this should lift the mood in the UK and investor confidence should rise slightly making Euros cheaper to buy. On Tuesday the UK will release the latest average earnings numbers and again a slight rise has been forecast. If the release meets expectation I would expect another small rise for the Pound.
Later in the week the UK and EU are both set to release their latest interest rate decision. This event has the potential to be a market mover but will be hard to predict. For Euro buyers I wouldn’t take the risk if we see an uplift earlier in the week.
If you’d like to discuss the above factors and how they could impact exchange rates linked to your transfer, please feel free to get in touch directly and I’ll be happy to discuss your requirements. You can reach me on firstname.lastname@example.org.