In today’s Pound to Euro forecast, we’ll see how the Pound to Euro exchange rate has drifted lower, ahead of the new British Prime Minister (PM) being announced later today. The new PM is expected to be announced at 11.30 this morning, with Boris Johnson believed to win the leadership contest against Jeremy Hunt by some margin.
The markets are predominantly interested in the course of action the new leader will take on Brexit and his readiness to take Britain out the EU without a deal on 31st October 2019.
There is a growing expectation that a general election may need to be called if Boris is unable to persuade his fellow MPs to back a ‘no deal’ Brexit, if the EU is unprepared to change its stance and offer a better deal to the UK.
The prospect of a ‘no deal’ Brexit or a general election continue to weigh heavily on the price of Sterling and could see the Pound fall sharply lower against the Euro, if these outcomes begin to look even more credible than they are already.
The National Institute for Economic and Social Research (NIESR) have predicted a 25% chance of a recession in the UK and a 40% chance of a no deal happening. The Pound is likely to struggle to move higher until these risks have been removed.
Euro exchange forecast
Recent reports form the EU indicate that ‘no deal’ planning is being advanced with billions of Euros being put aside to protect Ireland, which would suffer tremendously if ‘no deal’ is reached. With the UK summer Parliamentary recess to start 25th July, any Brexit developments may have to wait until Parliament returns at the beginning of September.
Those with pending requirement either to buy or sell Euros would be sensible to consider their options and plan around these important developments on the issue of Brexit.
For the time being there is an excellent opportunity to sell Euros to buy Pounds, having seen a drop in the GBP to EUR rate by over 6 cents since the beginning of May. Where the Pound heads from here will likely be driven by speeches made from Boris Johnson, assuming he becomes the next Prime Minister.
For more information on Euro exchange rates and assistance in making transfers, then please contact me, James Lovick, at email@example.com