The Pound to Euro rate has once again bounced off of the 1.12 mark so far today, which is a trend we’ve seen repeatedly this week.
Just yesterday the Bank of England (BoE) voted in favour of keeping interest rates on hold, as did the European Central Bank (ECB) although the pound climbed afterwards after some positive communications regarding wage growth in the UK. Should this area of the economy continue to strengthen I expect further interest rate hikes from the BoE next year, which is perhaps why we saw Sterling climb after the BoE decision.
This morning Sterling is under some pressure which is why 1.12 was tested again between GBP/EUR. The Governor of the Bank of England, Mark Carney yesterday warned that if there is no deal in place when the UK leaves the European Union, there could be a house price crash in the UK along with another financial shock through the economy.
Carney met with senior ministers yesterday to discuss the effects of a disorderly exit from the EU, and his prediction of a worst case scenario is a 35% drop in property prices over three years. He has made similar commentaries in the past and the Bank of England is carrying out stress tests in case of a no-deal and also releasing notices aimed at business and the public to prepare them for a no-deal scenario.
Brexit related news is the main mover of Sterling exchange rates at the moment and I expect this to continue especially now that time to agree a deal is running out.
If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on email@example.com and I will endeavour to get back to you as soon as I can.