In this Euro Pound forecast, we’ll see how this morning the EU agreed to an extension of the current Brexit deadline to the 31st January 2020, with an option to leave earlier if the Withdrawal Agreement is ratified.
The market will now look forward to news of whether a UK general election will be held prior to the end of the year. This afternoon, Members of Parliament will vote for an early election to be held on the 12th December this year. Two thirds of MPs will need to agree to the vote of an early election. However, this will require the support of Labour and it is yet to be seen whether they will support it.
Today, we have seen the Euro/Pound interbank exchange rate range between a low of 0.8615 and a high of 0.8652.
Sell Euros outlook: Will the Euro/Pound edge higher?
Last week in Mario Draghi’s final meeting, the European Central Bank (ECB) left policy unchanged, following the stimulus package announced last month. There may be limited scope for the ECB to support the economy, whilst growth in the EU is forecast to be softer in the third quarter of this year. Germany has suggested €50bn of extra spending could be injected into its economy, if there is a downturn in the economic outlook.
Previously, when we have seen an extension granted on the Brexit deadline, we have seen the Pound weaken after a period of time, as uncertainty prevails. This, coupled with the added uncertainty of a UK general election, could add further pressure on the Pound to weaken. If we see this happen, then we could see the Euro/Pound interbank exchange rate start to edge higher.
With this in mind, if you are waiting for the Euro/Pound interbank exchange rate to rise further, then please let me know and I can keep a close eye on the market for you and alert you when it moves accordingly. Please contact me directly by email here.
If you do not have the funds available now, we can always secure your currency on a forward contract, allowing you to secure an exchange rate today for a future payment. This requires a 10% deposit with the balance being paid on a date of your choice, up to one year ahead.