The pound has been under a lot of pressure recently owing to a huge amount of political uncertainty.
European elections this week to cause volatility for pound to euro rate
After getting close to a 2 year high against the euro only earlier this month the pound has started to fall.
Later this week the European elections are due to take place. The results are likely to be mixed and the Brexit party are expected to win a number of votes. This could once again cause problems for sterling exchange rates against the Euro. My reasoning is that it challenges the current status quo of the two major political parties in the UK. We could also see other parties gain more votes and this could help them curry favour prior to a potential general election.
June’s Brexit vote
The next trigger point for the pound vs the euro comes next month when the next Brexit vote is due. The vote is likely to be defeated and this will lead to Theresa May announcing plans for her resignation. A timescale has yet to be announced but there have been a number of individuals throwing their hat in to the arena. Some of them are Brexiteers and this could heighten the risk of a no-deal Brexit. Clearly, very few people want this to happen but as we have seen there is still a risk of a no deal. This could potentially have a negative effect on pound to euro rates.
Cross party Brexit talks have also broken down recently. Therefore, I do not expect to see any material change to the terms of the vote in early June. This is why I think it will be rejected.
Overall, I think the pound could face a lot of problems in the next two weeks. Therefore, if you need to buy euros it may be worth getting this organised in the near future.
If you would like a free quote when buying or selling euros then contact me directly using the form below. I look forward to hearing from you.