GBP EUR rates have found a small degree of support this morning with levels pushing marginally higher towards 1.13. As we move into 2018 the focus will largely revolve around what happens in the Brexit negotiations. Despite some positive movement in the run up to Christmas when the first round of negotiations was completed after it was deemed sufficed progress had been made the pound has come under pressure.
The prospect of a very long winded negotiation in the future trade relations appears to be having a negative impact on the pound and until greater clarity as to where everything is headed then any gains for GBP EUR are likely to be limited. Many of the EU leaders have highlighted how hard the talks will be and that it will be sufficiently harder to reach agreements compared to the first phase now completed.
The Euro is also likely to see a very volatile period with both the ongoing Catalonia situation and the lack of a government in Germany. The separatist movement has won the upper hand after the regional election just before Christmas so a period of negotiation between Madrid and Catalonia will now prevail. If there is another period of violence or heightened tension then this is likely to be damaging for the Euro. It is worth remembering that Barcelona comprises a large percentage of Spanish GDP so any negative news is here is likely to be Euro negative.
Ongoing negotiations in Germany to form a coalition government are still taking place which leaves an uncertain outlook for the Eurozone and hence the Euro.
Clients with pending requirement to either buy or sell Euros are likely to see a rollercoaster in the coming weeks as we move into 2018. There are likely to be some good opportunities for buyers and sellers alike so please feel free to get in touch with me at email@example.com