The pound to euro exchange rate reached a one-month high this week as news that the Bank of England were less likely to be cutting interest rates next week triggered a rebound in confidence for the British currency. Investors have been closely tracking the latest UK economic data to see if the early indications that a rate cut was likely will be realised. The news that the UK Unemployment rate remained at a 40-year low combined with fresh record highs on employment reaching 76.3% all helped to trigger a rise in sterling as the market became more optimistic about the direction for the UK ahead.
Digital Tax Comments Cause Tension With US Officials
Other economic news this week on Brexit increased the importance of understanding the UK‘s future trading relationship with the wider world, as Sajid Javid, the British Chancellor confirmed he would be pursuing a digital tax on firms like Facebook and Google, much to the irk of Steven Mnuchin, US States Secretary of the Treasury, who threatened retaliatory measures on the automotive sector. Looking forward, the expectations surrounding the UK’s relationship with both the US and EU could be crucial to future developments on the pound. Sajid Javid also talked up the prospect of the UK forging it’s own rules and regulations, diverting away from current EU practices, only for him to backtrack on this and state the UK would take a pragmatic approach.
Sterling Hits 2020 High Against the Euro
The GBP/EUR interbank rate has reached 1.1917 at its highest point on Friday, presenting over a one-month high to buy euros. Next week’s UK interest rate decision and also the January 31st Brexit date are the key ones to watch, with lots of attention focussed on how the pound will react. If you are holding on hoping for a better rate of exchange from these events, why not get in touch with us to discuss some strategies which might help you to capture any desired level.
If you have any GBP/EUR currency transfers to consider and wish to be kept up to date with all the events and news in the market ahead of this potential crucial time. Feel free to contact myself, Jonathan Watson, using the form below.