The pound has fallen lower against the Euro this week creating some of the best opportunities this year for selling Euros and converting into pounds. Rates for GBP EUR have slipped into the 1.11’s testing the lower levels in this range.
Much of the market movement has stemmed from sterling weakness as opposed to Euro strength largely as result of the pollical uncertainty in the UK and the ongoing Brexit negotiations. UK Prime Minister Theresa May narrowly avoided defeat in the House of Commons this week over an amendment that was put forward that would seek to keep Britain in a customs union if there was a no deal scenario. By winning by just 6 votes the Prime Minister avoided a vote of no confidence although that prospect is still a possibility. The Prime Minister is battling to keep the conservative party united on the divisive issue of Brexit and this unlikely to change any time soon. Until a breakthrough is made which in my opinion won’t be seen for a period of months then the pound is likely to remain on the back foot.
The pound may have further to fall against the Euro considering that both the UK and EU have both signalled this week there is strong likelihood for a no deal Brexit scenario. This is having a negative impact on the price of sterling as it carries with it a higher risk strategy and greater uncertainty for the British economy.
UK retail sales data for June also arrived weaker than expected which has resulted in a further fall for GBP EUR. The markets were hoping for bigger things with all the hot weather but the numbers have in fact arrived weaker than expected putting added pressure on GBP EUR. There is a GDP estimate from the National Institute for Economic and Social Research later today which could see a boost fort he pound on a stronger number.
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