Chancellor warns of leadership plans
Pound vs euro exchange rates remain range-bound, with the interbank rate currently at 1.26 at the time of writing. The Chancellor of the Exchequer has spoken out about the plans made by Boris and Jeremy Hunt. Philip Hammond has said that their plans ‘greatly exceed’ what is available with the Treasury. In the last few years the Treasury’s surplus has increased. However, not by as much as what the two candidates have pledged.
We are now just three weeks away from the official announcement. Therefore, I fully expect to see some heightened volatility on GBP/EUR exchange rates during this time. With a total of 160,000 Tory members voting will start taking place next week. Therefore, if you’re considering making a currency transfer make sure you pay close attention to the leadership battle.
Monetary policy in the UK: Will Mark Carney’s speech offer support to Sterling?
Later today Bank of England governor Mark Carney will be speaking. He has been very cautious in his tone towards Brexit so could his comments later today see the pound lose value against the euro?
With UK economic data remaining relatively strong, some of the members of the MPC are suggesting that they may be in favour of an interest rate hike. Clearly, whilst Brexit is dominating the economy I cannot see the central bank looking to change rates anytime soon.
Eurozone Unemployment data
Meanwhile, the Eurozone has published unemployment figures for May. The data showed a fall to 7.5% which was the lowest in the last ten years. However, there is a real disparity between a number of the different countries. Italian unemployment is at 9.9% and Spain is showing 13.6%.
Clearly all is not rosy on the continent but it is the leadership election as well as Brexit that is determining what is happening with GBP/EUR exchange rates. With three weeks to go before the new Prime Minister I think we could see a lot of movement on Euro exchange rates.
If you’re in the process of buying a property in Europe in the weeks ahead it may be worth buying a forward contract. If you would like a free quote and would like to save money on exchange rates, then contact me directly and I look forward to hearing from you.