Later today, Boris Johnson will officially become the UK’s new British Prime Minister. Yesterday, on the new of a Boris Premiership, the pound to euro exchange rate rose fractionally as the news came out, and we did then also see some further improvements for euro buyers, as the euro lost ground too.
New Brexit plans proposed by Boris government to cause volatility for GBP/EUR exchange rates
GBP/EUR rates are having a better week, as the certainty presented by having a new Prime Minister and concerns the ECB (European Central Bank) will cut rates tomorrow, all combine to present a much better opportunity for euro buyers.
The new PM will have plenty to greet him when he takes up office, with Brexit surely top of the pile. Frustratingly for us all the UK Parliament begins its summer recess this week and will not formally sit again until September 3rd. With the Brexit deadline of 31st October looming, it does not appear there is a huge amount of time to formalise Brexit plans, although it is possible.
Sterling to euro exchange rates seem to be reflective of the possibility of a no-deal Brexit becoming more likely, as investors price in the possibility. Boris Johnson has shown he is willing to consider a no-deal Brexit although it is not his preferred option.
Rabobank Brexit Pound to Euro prediction
In a sign of what could lie ahead for the pound, predictions from Dutch bank ‘Rabobank’ for the next 6 months see GBP/EUR at parity if no-deal takes place. Their central forecast is for an extension in October, which they predict will see 1.15 by January. Any signs of a deal being struck would see GBP/EUR levels rising to 1.20 in their opinion.
With the current interbank rate around 1.1174 at the time of writing, we are 1 3/4 cents above the 1.10 lows of January 1st, but 6 cents below the peak seen in May of just below 1.18. If you have a position to buy or sell Euros against pounds in the future, we have plenty to discuss at the moment including the ECB interest rate decision later this week and also the impact of the new UK PM, and what type of Brexit we could be aiming for.
Thank you for reading, if you would like to learn more or have an upcoming currency transfer, feel free to contact me directly using the form below.