Pound to Euro exchange rate: Euro weakness sees the Pound make a short-term bounce back
The pound to euro exchange rate has been nudging the 10-year low on the interbank, having broken through the 1.07 mark on Friday, testing 1.064. this is the lowest level seen since January 2009, breaching the 1.0730 lows of August 2017. The euro has been weaker since Friday last week, following the news that the Germany economy is not growing as fast as hoped, with the recent economic growth figures released suggested a contraction or recession could be on the horizon. The potential for euro weakness ahead may stem also from the European Central Bank (ECB), who will meet in September with a prediction they might cut interest rates. Will GBP/EUR levels go back to 1.10?
Correlation between no deal Brexit and Sterling weakness
It was almost unthinkable a few weeks ago that pound to euro exchange rates would possibly sink below 1.10, but the currency markets are unpredictable beasts. Expectations ahead for the pound remain largely linked to Brexit, with sterling having been rising and falling according to the latest sentiment and news on Brexit. Generally speaking, any signs that there will be a no-deal Brexit has seen the pound fall in value, owing to the uncertainty it represents. On the flipside, the market has generally responded positively for sterling following any signs of a trade deal being reached, or that either Brexit might be delayed or an extension put in place.
Pound to Euro Forecast: What ahead could influence GBP/EUR rates?
The pound to euro rate will be determined by a range of factors ahead, key events include when the UK government comes back in from its summer recess, and also the next ECB meeting. Clients looking for GBP/EUR rates to rise back 1.10 may need to see more positivity on Brexit, coupled with signs the euro will weaken. Of course, no one can predict the currency markets and these events occurring are no guarantee that rates would go back to the 1.10 mark.
If you have a transfer ahead and wish to discuss and review the latest news and events ahead, please speak to our team.