The pound has seen an excellent spike against the Euro today with rates hitting a high of 1.1131 before falling slightly lower to below 1.11 in afternoon trade. UK inflation rose to 2.9% in August up from 2.6% the previous month. The stronger numbers caught the markets off-guard which resulted in a spike for sterling exchange rates with gains of over 1% against the Euro.
However this is unlikely to be a be a sustainable recovery with Brexit still remaining the dominating driver for GBP EUR. The Bank of England meeting on Thursday will tell us just how seriously this new data is being considered. My view is that the central bank is still unlikely to take any action and any rate increase is still some way off.
Those clients looking to sell Euros would be wise to consider moving sooner rather than later and take the risk out of the volatile currency markets. Whilst there are likely to be some good opportunities for those clients looking to sell Euros as Brexit unfolds I am of the opinion that the perception of Brexit is changing. Higher interest rates and any real progress in the negotiations could see the pound rally although we are not quite at that stage yet. A specch from Theresa May later this month could also create major market movement for GBP EUR. The last speech she gave on Brexit in January saw the pound rally almost 2%.
EU industrial production numbers and employment change data are released tomorrow which could impact on Euro exchange rates although UK unemployment data could see a bigger shift for GBP EUR.
If you would like further information on Euro exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on email@example.com