If you are reading these currency forecast articles for the first time as you have a pending pound to euro currency exchange, now is the time to formulate a plan as the Brexit negotiations are coming to an end and I expect major volatility for the pound to euro rate in the upcoming weeks.
What’s holding back a Brexit deal?
By all accounts UK and EU negotiators have been sipping coffee into the early hours of the morning to try and finalise a Brexit deal, as head EU negotiator Michel Barnier has warned that for an emergency summit to take place this month a deal needs to be reached by the end of tomorrow.
The major sticking point at the moment is an element of the temporary customs union known as the ‘backstop agreement’. The UK want an exit mechanism which means that the UK can leave a temporary customs agreement when requested, however the EU are playing hardball and stating the European Court of Justice must make the final decision.
This is a major problem for the Prime Minister as she knows that if she gives in to the EU demands, its extremely unlikely that MPs within the House of Commons will sign off on the final deal.
The outlook for buying euros with pounds
For people that are converting pounds into euros or euros into pounds, now is the time to make a plan. Over the last 12 months GBP/EUR exchange rates have fluctuated between 1.10 and 1.1550 and I expect rates could break through either resistance point in the upcoming weeks depending on the outcome of the negotiations.
For those that are buying property abroad it’s extremely important to understand the final amount you will pay for your property is about to change in the upcoming weeks. If the negotiations don’t go to plan and Theresa May is either forced to accept the European Court of Justice make the final decision in regards to exiting the backstop or the PM leads the UK to a no deal Brexit, I expect GBP/EUR exchange rates will fall close to 1.06. To put this into monetary value a €200,000 property purchase would then cost an additional £14,500.
For more information about pound to euro exchange rates and the events that could potentially affect a currency exchange feel free to get in contact with me directly using the form below.