After the Bank of England raised the interest rate last week in the UK the Pound is now trading at its lowest level against the Euro since last year. The hike was expected but the overall tone given by the central bank was rather dovish and hints have been given that we may even be headed towards a ‘no deal’ Brexit.
Bank of England governor Mark Carney has spoken out on the subject as well as UK Trade Secretary Liam Fox who have both suggested that the odds are increasing of a no deal and this has seriously affected the value of the Pound against a number of different currencies as well as against the Euro.
Indeed, since the Chequers meeting last month which saw a number of key resignations the Pound has been under of lot of pressure.
During the course of this week the Pound has been the worst performing currency out of the G10 nations and I expect this trend to continue.
Moving towards the end of the week we have the release of the latest set of UK GDP figures and this is likely to be the biggest mover of GBPEUR exchange rates over the next few days.
The expectation is for growth of 0.1% for the second quarter and anything lower could heap more pressure on the value of Sterling potentially sending rates to buy Euros in to the 1.10 levels by the end of this week.
Looking at everything that is happening in the UK at the moment it appears as if there is a lot more negative news than positive so my expectation is for further losses for the Pound vs the Euro and unless we get some positive news surrounding Brexit I think we’ll see more pressure on Sterling.
If you are in the process of buying a property abroad and are concerned about the future of the Pound it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date.
To find out more or for a free quote then contact me directly and I look forward to hearing from you.
Tom Holian email@example.com