Pound under pressure after Theresa May resigns
The pound to euro rate has once again endured a difficult week. GBP/EUR exchange rates are now trading at their lowest level in 3 months. The pound has struggled owing to the political uncertainty at the moment after Theresa May announced her resignation on Friday. She has given herself two weeks to leave, after which
the process of electing the next Tory leader will begin.
Two of the front runners for job are Boris Johnson and Andrea Leadsom, both of whom are pro-Brexit.
Will a pro-Brexit PM weaken the pound to euro rate?
There could be potential problems for sterling exchange rates as a pro-Brexit PM could increase the risks of a no deal Brexit. Although a no deal Brexit is extremely unlikely, there is still a possibility of it happening. Therefore, a pro-Brexit PM could cause problems for the pound vs the euro.
Whatever the outcome, the next two weeks pound to euro rates are likely to see a lot of volatility. Therefore, if you’re thinking of making a currency transfer involving the GBP/EUR pair then it may be worth getting this organised early next week.
Will Brexit happen?
If the new Prime Minister manages to somehow galvanise the Tory party and be able to make progress with the Brexit Withdrawal Agreement, then this could give the pound a real boost.
However, I think since December it has become very clear that the House of Commons is not in favour of Brexit. The original deadline of 29th March is now well and truly behind us and I cannot see much changing in terms of getting a deal agreed.
The next big issue for the pound vs the euro is the potential of a general election in the next few months.
An election often brings with it a great deal of uncertainty and this does not bode well for the pound. Therefore, if you’re considering buying euros for a foreign property in the weeks ahead it may be worth considering buying a forward contract, which allows you to fix an exchange rate for a future date.
To find out more or if you would like to save money on exchange rates compared to using your own bank then contact me directly and I look forward to hearing from you.