The EUR weakened yesterday following the much anticipated speech from UK Prime Minister Theresa May, where she outlined plans for our Brexit.
This was a far more detailed proposal than anything released prior to this and as such the markets reacted positively to it, with the Pound gaining traction against the single currency.
The EUR value dipped against the Pound, with GBP/EUR rates now trading around 1.1550. The EUR lost approximately two cents as investor confidence returned to the UK economy, as May’s speech had a far more positive tone throughout than we expected.
Investors now have some solid information to work with rather than guess work and rumours and despite confirmation that the UK will leave the single market completely following the triggering of Article 50 in March, it is clear the UK government still want a close relationship with our nearest trade partners.
This is news which has is likely to help support Sterling’s value in the short-term and as such EUR sellers may wish to take advantage of the near three year highs rather than gamble on another aggressive spike.
The EUR is likely to come under pressure as we move through 2017, with the fall out form the UK’s Brexit likely to have similar if not greater impact on the Eurozone economy than the UK’s . They are losing an integral member of the EU and as such, it is likely to have a negative effect on their financial and economic stability.
The European Central Bank (ECB) have already extended their current monetary policy (QE) programme to help support the Eurozone economy over the coming months but with such heavy losses against the USD and other major currencies, how long before this downturn is mirrored against Sterling?
With key political elections in the Netherlands, France & Germany this year and increase in support for the far right movement, the political landscape could look very different by the end of this year and any instability or uncertainty is unlikely to help support any major advances for the EUR.
We also need considers comments made yesterday by President of the European Commission Jean-Claude Juncker, which indicate that it would do the Eurozone economy no favours to try and punish the UK for leaving and again this is news, which is likely to bring further investor confidence back to the Pound.
All of this leads me to the conclusion that EUR sellers should be protecting themselves and taking advantage of the current levels, as they may well look extremely attractive in months to come.
If you have an upcoming EUR currency transfers to make and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact us on 0044 1494 725 353 and ask one of the team for Matt.
Alternatively, I can be emailed directly on email@example.com