The pound to Euro exchange rate has often been quoted as a barometer of the Brexit uncertainties, and to no real surprise it has gently drifted lower this week as we head into the UK Easter weekend. The absence of any new positive news has seen the pound lower and investors, clients and other interested parties are not comfortable holding sterling because of the precarious nature of what lies ahead.
Pound to Euro rates lower, but still higher than the start of 2019
It is well worth pointing out that those buying Euros with pounds are still performing trades at a very high level. A £250,000 purchase of Euros will today deliver an €14,000 extra compared to January 1st. The optimism that a ‘no-deal’ Brexit is now much less likely, or will not happen at all has seen the pound supported.
The outlook ahead for Euro exchange rates had been rather shaky and could continue to be in the months ahead. This is owing to increased political questions (more on which later), and economic concerns too. However, the latest weakness has subsided, as the potential for a breakthrough in the US-China trade talks, provides some optimism over how US-EU talks will pan out.
Will GBP/EUR rates rise or fall in April and May?
Overall those looking to purchase Euros with pounds have, I feel great concerns ahead, since Brexit uncertainties do outweigh concerns on the continent. Moving forward we have two major political tests too, the UK local elections on the 2nd May and the European elections on May 23rd.
Personally, I expect the pound to suffer during these as voters reject Theresa May and Jeremy Corbyn for their poor handling of Brexit so far. The belief is that both parties will suffer, with the Tories expected to suffer the most.
We are already seeing signs of the Brexit Party performing well in the polls and this could bode well for Mr Farage and further complicates the already fractured picture on Brexit.
What next for pound to Euro exchange rates?
I foresee a lower range for GBP/EUR rates of the 1.10-1.11 is still a real possibility if events take certain directions. With any surprise optimism we could retest the 1.18 handle, providing further opportunities for Euro buyers.
If you have a position to buy or sell the pound against the Euro, there are no shortage of events to move the rate. Forecasting is no easy feat, but with our expert knowledge of the FX markets and many years’ experience, we can provide an informed voice to provide options and discuss strategy.
Thank you for reading my latest pound to Euro forecast. If you would like more information on GBP/EUR rates or have a currency transfer you would like to discuss please feel free to contact me using the form below: