The EUR has made significant strides against Sterling, since the unexpected UK general election result last week.
UK Prime Minister Theresa May was left stunned, as her Conservative party failed to gain the majority required to take control of Westminster and more importantly Brexit negotiations.
Investor confidence in the UK was already extremely fragile and the vote left the UK public in a state of limbo, as fears over Brexit negotiations and the future of the UK economy in doubt. The markets reacted accordingly with Sterling losing value immediately, with the EUR being one of the main benefactors as a result of this downturn.
The EUR has gained almost four cents over the past month, with GBP/EUR rates trading just above 1.13 at today’s high. EUR sellers have once again been presented with an opportunity due to a lack of confidence in the Pound and in my opinion, should be taking advantage as a result.
With so much uncertainty surrounding the future of both economies, in particular how each will fair during the Brexit separation process, are you willing to gamble on another major upturn for the single currency?
To put it in monetary terms any client selling 100,000 EUR/GBP position will have gained almost £2000 at the high, from the same trade just prior to the UK elections. With an increase in value not attributed to an overriding investor confidence in the Eurozone region, the key question now is whether the single currency is likely to make further significant strides against the Pound?
Whilst current market forecasts are proving increasingly difficult to dissect, history tells us that the EUR rarely trades at the current levels for long. It is likely that the Conservatives will form an alliance sooner rather than later and any political stability could help boost Sterling’s value. This is particularly poignant when you consider the boost it received today following positive inflation figures and with so much uncertainty regarding the political & economic outlook inside the Eurozone, now could be the perfect time to lock in any short to medium EUR currency transfers.
If you have an upcoming EUR currency transfer 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 me on 0044 1494 787 478 and ask one of the team for Matt.
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