If you want to know the best time to buy Euros, you might like to know that the Pound to Euro exchange rate has rallied higher, breaking over 1.17, on renewed optimism that a Brexit deal with cross-party support could be in the offing. Prime Minister Theresa May has set a deadline of tomorrow for when talks should conclude between the Labour and Conservative parties.
GBP vs EUR rates are likely to see considerable market reaction in these coming days, as the markets attempt to predict the final destination of Brexit. Any positive statements, suggesting that there is a deal that could command a majority in Parliament, could see the Pound rally higher against the Euro.
However, it is worth highlighting that Britain is still likely to be contesting the European elections on the 23rd May, and that could change the political landscape when it comes to Brexit. The Brexit Party, set up by Nigel Farage, is tipped to perform extremely well and this could see heavy losses for the Conservative and Labour parties.
Such a vote could act as a reinforcement that Brexit must be delivered, to the extent that it could pave the way forward for a harder type of Brexit. A strong win for Nigel Farage could also act as a springboard for his party, when it comes to the next UK general election.
Pound to Euro exchange rate forecast
UK Gross Domestic Product (GDP) numbers are released on Friday, which could act as a market-mover for the GBP EUR pair. There are growing signs that a lack of progress on Brexit is starting to have a negative impact on the economy.
Whilst unemployment is at record lows, which points to a healthy labour market, the worry is that economic growth may be starting to wane. A weaker set of numbers would likely see the Pound fall lower.
Meanwhile, in the EU, the economic picture has been improving of late. Italy has come out of its technical recession, with a better set of growth numbers, whilst France and Spain have also seen a positive jump higher. There had been concerns that Italy could remain in recession for an extended period, amidst recent political uncertainty. The positive growth numbers bode well for Euro exchange rates, going forward.
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