Pound to euro rates have touched 4-month lows, presenting clients looking to sell euros for pounds with a great opportunity. The path ahead for the euro is far from clear and we could easily see weakness should political and economic concerns resurface.
Pound to euro, why have rates dropped?
Pound to euro rates have dropped further as the market’s concerns over no-deal Brexit rise with the Tory leadership race seemingly focused on this issue. Expectations are for the pound to continue to struggle due to the market struggling to find too much positivity on Brexit. We are generally seeing the market pricing in the no-deal possibilities, this will only put further pressure on GBP/EUR rates.
Euro performing well after European elections
The euro is performing well following a tougher time after the European elections. The market had to factor in the increased chances of a rising in more extreme political views across the Eurozone. More recent economic news has seen the euro perform slightly better, as the market prices in the possibility of the Eurozone economy performing slightly better.
Pound to euro forecast
Clients looking to buy euros with pounds must I believe ask themselves, what do they expect will drive the pound higher today? I am struggling to see what kind of news will really help the pound to move higher, my personal pound to euro forecast is that sterling could drop lower, rather than rise.
Key events this month to move sterling will centre around the Bank of England decision on the 20th June, 2 weeks tomorrow. The Bank has been hinting at the possibility of raising rates in the future, but it seems unlikely this will happen anytime soon. Such hints previously failed to spark too much interest in sterling and the flipside on this, is that it would be not be surprising to see Mark Carney talking down the pound on the uncertainties around Brexit.
Thank you for reading and if you have a currency transaction to consider buying or selling euros, I would be most interested to speak to you regarding the situation and provide some insight which I hope will be beneficial.