Pound continues to slide against the euro
The pound to euro exchange rate continues to fall lower after a poor run for the GBP to EUR pair over these last 5 weeks. Rates for GBP/EUR fell to a low of 1.1141 this morning which represents a 5 month low and which is at least presenting those looking to sell Euros with a great opportunity to convert. The pound has dropped by over 5 cents in these last 5 weeks which means the difference on a £200,000 transfer is about €10,000. The sharp decline in a short time period has made buying euros much more expensive.
Conservative leadership contest vote today
Today sees the second round of voting in the Conservative Party leadership contest which will see another candidate knocked out and possibly more depending on how people vote. Perhaps more interesting will be the televised debate scheduled for this evening in which Boris Johnson will be taking part. All eyes will be on this debate and a good performance will almost certainly help his cause to become the next British Prime Minister. There are hopes from his team that he could be even crowned Prime Minister as soon as this evening depending on his performance and how the vote pans out.
Expect high volatility for GBP/EUR with a new Prime Minister in place as the course of Brexit is likely to change under new leadership. There still remains the prospect of a general election which too could see major currency volatility as this would alter the shape of the House of Commons which could have far reaching implications for Brexit. With such support from within the Conservative Party it is no sunrise that Boris Johnson is so widely tipped to become Prime Minister.
For the moment the prospect that the next Prime Minister will seek to take Britain out of the EU by 31st October with or without a deal is creating some uncertainty for GBP vs EUR exchange rates. Whilst Boris Johnson has made his views clear that Britain must leave the EU he has also said that a no deal Brexit is not his preferred outcome. Those with pending currency requirements would be wise to consider their options as developments unfold around this key political event.
Pound to euro forecast
The euro also faces troubles ahead as the EU economy battles with low inflation and weak growth as it has done for so many years now. The fact that European Central Bank President Mario Draghi has signalled the banks intent to reintroduce stimulus measures highlights real concerns for the EU economy as a whole. The US and Britain concluded asset purchasing schemes years ago and the EU’s willingness to explore these avenues could spell trouble for the EU going forward. With Italy in the midst of a debt crisis and the German economy seeing weaker exports and manufacturing the single currency could find itself under considerable pressure in the months ahead especially if US President Donald Trump targets the EU with trade tariffs as he is tipped to do so.
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