In today’s pound to euro exchange rate forecast we look at the last 14 trading days, during which time the pound has devalued daily against the euro. At the start of the month pound to euro mid market exchange rates were trading close to 1.1750 and at the time of writing this report mid market exchange rates are 1.1320. The pound has been on the decline due to political events in the UK.
Will Theresa May’s Brexit deal get the green light?
UK Prime Minister Theresa May is under severe pressure at present and only this morning her closest colleagues are suggesting that the PM will announce her departure date tomorrow. Earlier this week the Prime Minister set out her new Brexit plan, but the reality is that the deal is extremely similar to the deal that MPs have voted on previously. The chances of MPs giving the green light is extremely unlikely.
Will the pound strengthen against the euro?
Looking further ahead I expect the pound is going to continue to come under pressure against the euro as I believe the Prime Minister’s days are numbered. Once the leadership contest is over, I expect a Brexiteer will take over at No. 10 and the UK’s position in regards to Brexit will change. The Brexiteer will not have the power to crash the UK out of the EU, however the EU may give up on the UK, therefore the UK could crash out by default.
Pound to euro forecast: How could the European elections affect GBP/EUR rates?
In the short term, Europeans take to the polls over the next couple of days, with the UK and Netherlands attending today. Polls in the UK are suggesting that the Brexit party and Remain parties should do well. However I actually expect the voting patterns in other European countries will dictate the direction of GBP/EUR rates short term. If there is an increase in seats for far right groups, passing new legislation in the years to come is going to be difficult and this could provide an opportunity for clients buying euros.
If you are buying euros short term and have waited this long, holding off until the election results are published may be your best option.
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