Will Boris win the leadership election?
This week has seen the Tories vote heavily in favour of Boris Johnson to become the next Prime Minister.
Boris won the first round of voting with 114 votes which was way ahead of the second candidate. Although there are still many votes to come it is difficult at this stage to see someone take the lead. Therefore, there is a strong possibility that Boris Johnson will replace Theresa May as Prime Minister next month.
The impact on the currency markets if Boris wins is still not clear. Boris has claimed that he will make sure the UK leaves the European Union by the end of October. Personally I don’t think he will be able to carry out his promise. It has been clear since December when the voting for the Withdrawal Bill began that the House of Commons are the ones who need convincing.
The European Union have also claimed that they are not prepared to negotiate on the current plans so are the talks in the House of Commons even worth having?
Will Europe grant an extension?
Brussels has warned over the weekend that Britain will not leave the European Union this year even with a no deal. They believe that EU leaders will end up granting an extension which will add further uncertainty to the Pound.
Therefore, although we might get a brief respite for GBPEUR exchange rates once we have a new leader I think there is a huge amount of uncertainty towards the latter part of this year.
If you’re in the process of buying a property in Europe and want to guarantee an exchange rate for a future date then it may be worth buying a forward contract. This allows you to fix an exchange rate so you know early on what your dream property will cost.
If you would like to save money on exchange rates compared to using your own bank then contact me directly for a free quote and I look forward to hearing from you.