The Pound has remained reasonably flat against the Euro this week as we enter the festive season and I feel that this may be the situation until the end of the trading year, unless any large surprises pop up.
With very little news due to come out from Brexit now that Parliament are due to take their recess period the market will be reliant on general sentiment and any surprise news that hits the media.
Generally at this time of year you can find that trading levels are much thinner, so if there are any developments with Brexit or any market moving releases, then you may see the rates move a little more than normal.
Will Sterling Euro drop below 1.10?
Many of my clients are now asking me if I feel the rate could drop back below a key resistance level of 1.10 and I have to say that in my opinion the answer is yes. Whether or not it stays below 1.10 for a long period of time will be dependent on how things go for Theresa May in her Parliamentary vote. As it stands if you look at both sides of GBP/EUR politically and in terms of economic performance the Pound has more chance of dropping than rising.
UK growth downgraded
Growth expectations were yesterday downgraded for the UK by Bank of England Governor Mark Carney, from 0.3% to 0.2% and even matters like the Gatwick drone issue will not help economic performance for December as airlines will have a huge headache to try and overcome.
Parliament expected to vote down current Brexit deal
The Parliamentary vote on Brexit is due to happen in mid January and I really do not see how Theresa May is going to get enough support to push through her deal. I cannot see her getting enough improvement on its current terms to turn enough heads.
I would expect Sterling to wobble in advance of this vote, however it would not be a surprise to see the Pound strengthen after it, even is she loses as although it does open up the possibility of a ‘no deal’ Brexit it does also give the potential of Theresa May leaving and someone else taking the reigns. This may delay or even cancel Article 50 which could actually give Sterling a huge boost.
All in all if you have a large exchange to make in the near future involving buying or selling Euros then it is key that you deal with a proactive and efficient currency broker that can help you negotiate these choppy waters ahead. We here at Pound Sterling Forecast can help you with this, along with helping you secure a highly competitive rate when you do come to actually lock in your exchange.
Fill in the form below and I will be happy to contact you personally and to help you tailor a game plan for your specific situation.