In this update about when to sell Euros, we’ll examine how the Pound to Euro exchange rate inches lower, as the two Conservative MPs battle it out for the role of Prime Minister. British politics and the course of Brexit remains the biggest driver for the GBP vs EUR pair.
Boris Johnson’s and Jeremy Hunt’s two different approaches are creating a new wave of uncertainty for Sterling exchange rates. The Pound vs Euro exchange rate has now fallen to 1.1150, creating a good opportunity for those looking to sell Euros.
The new Prime Minister will be announced on 23rd July and will be in power the following day. Any policy decisions announced shortly after this time, either before or after the summer recess, will likely see significant market volatility, as the markets try to determine the final path for Brexit. The bottom line is that a ‘no deal’ will be seen as negative for GBP to EUR whilst a deal will likely see the Pound strengthen.
Euro exchange forecast
The Euro meanwhile looks set for a rough time ahead with a number of issues affecting the Eurozone economy. The Italian crisis has a new development in that the ruling coalition are seeking to take the Bank of Italy under government control.
The move is at odds with EU treaty law and will irritate the EU, at a time when the European Commission is seeking to impose financial penalties on Italy for failing to adhere to budget deficit rules. There is talk of a six month delay for Italy to make corrective measures, which may diffuse current tensions.
The European Central Bank (ECB) has also indicated its willingness to introduce additional asset purchasing schemes to maintain stability within the bloc. These are effectively a form of quantitative easing. ECB President Mario Draghi has been quoted saying that he will use all necessary instruments to maintain growth and inflation. The EU is suffering on the back of a weaker global economic outlook, partly spurred by the US/China trade war, and Brexit concerns.
The issue for the EU is that the US and UK completed quantitative easing years ago. This indicates that the EU has never fully recovered from the financial crisis of 2008. Whilst the US is contemplating interest rate cuts at present, it must be highlighted that the Fed has been the most aggressive in raising interest rates over the last few years. It is still some way ahead of the curve. It means that the Euro may have further to slide if there is a downturn.
For more information on Euro exchange rates and for assistance in making transfers, either buying or selling Euros, then please contact me, James Lovick, at email@example.com.