Over the last month pound to euro exchange rates have plummeted from the high 1.17s to the mid 1.12s at the time of writing this report. For clients that are making an upcoming currency transfer of pounds to euros the fall means that a €200,000 purchase now costs approximately £8,000 more compared to only 30 days ago.
Will pound to euro exchange rates recover?
The golden question many of my clients are asking is whether the GBP/EUR rates will recover in the upcoming weeks and months.
The reason why the pound has lost so much value is due to the handling of Brexit. We now know that the Prime Minster Theresa May is passing on the mantle and the likelihood is that a Brexiteer will take control of No10. It’s important to understand that a Brexiteer can’t simply crash the UK out of the EU as they will need to seek parliamentary approval, however the likelihood is that the UKs stance in regards to the withdrawal agreement will change and this is why the likelihood of the UK leaving the EU without a deal is increased.
Pound to euro rate forecast
Personally, I don’t believe the pound will recover anytime soon. UK economic data has actually impressed over the last month. GDP for the quarter was revised up to 0.5% from 0.2%, unemployment remains at record lows and manufacturing/production numbers exceeded expectation. Therefore, it’s evident that the Brexit saga is the reason for sterling demise and it doesn’t look like the issue will be resolved anytime soon. If you are buying euros short term for a property purchase, even though the rates have dropped substantially, mid-market levels at Christmas were 2/3 cents lower than they are now, therefore I believe there is scope for rates to fall further.
ECB interest rate decision, could there be further pressure on the euro?
Thursday the European Central Bank will release their latest interest rate decision. Interest rates are set to remain on hold, therefore it will be Mario Draghi’s press release shortly after that influences pound to euro exchange rates. With global tensions high due to the ongoing trade war, it will be interesting to see how the president summarises how the trade war is impacting the European economy. It could be the case that this event puts pressure on the euro and provides an opportunity for euro buyers.
If you are buying euros and would like help to get highly competitive rates whilst being supported with regular economic information, feel free to fill in the form below and I will contact you directly. If you have sold property or are in the process of selling property abroad and need to repatriate back to sterling again feel free to fill in the form below.