Conservative leadership contest down to two contenders
The pound to euro exchange rate has been at the mercy of the latest news on the Conservative leadership contest, as investors and the market debate what lies ahead for the UK and for Brexit. With the race now between Boris and Hunt, we are in for a few weeks of strong campaigns on both sides which might sway sterling exchange rates.
It is tempting to assume that a new leader would help the pound but with the lack of clarity over which direction Brexit will ultimately take, investors are nervous over whether or not to support the pound. Indeed, the increased chance of a no-deal Brexit, has actually kept sterling under pressure.
Will Pound to Euro rates rise?
The euro has had a tough week with the ECB (European Central Bank) seeking to highlight that there could be further room for QE (Quantitative Easing) in the future, if inflation does not pick up. Investors are now keenly watching the economic data for the eurozone to ascertain whether or not we might see further expansion by the central bank.
Pound to Euro forecast during the leadership contest
Overall, we could be in for a very turbulent time for GBP/EUR rates as the market struggles to price in the conflicting uncertainties present in the market. We are now looking at an increasingly uncertain direction for both currencies which will in my opinion lead to more volatility.
It might end up as a contest and battle between which is ultimately the weaker currency, the pound or the euro. And whilst it appears it is Boris Johnson’s race to lose, one thing the last few years have taught me is to not always discount the unexpected.
Clients with a pound to euro rate should be making careful plans with the rate easily able to move 1-2 cents in either direction quickly as news develops. For a personal and comprehensive review of your currency plans, please do contact myself, Jonathan, to discuss any currency transfers you might be considering up ahead. You can contact me directly using the form below: