Expectations for the pound to Euro rate over the coming months are to see a wide range of levels perhaps trapped in the more recent ranges between 1.15 and 1.20. I would expect the rate will drop further longer term since it appears the Euro is really benefiting from improved confidence in the region. The improved economic data, the removal of uncertainty relating to a Le Pen victory and progress on the Greek debt situation has all lend support to the Euro. What happens next for Euro to pound exchange rates?
Despite it appearing GBPEUR will trade closer to 1.15 than 1.20 in the coming weeks owing to uncertainty over the Brexit and a stronger Euro there is potentially scope for Euro weakness. Technically the Greek debt situation is ongoing as investors try to come to terms to agree upon. the next big meeting is in June, progress has not been forthcoming but a belief it will all resolve itself is helping the Euro.
The pound may rise on the back of a strong Theresa May victory but markets must also look to the potential for the pound to then fall once the reality of her task ahead negotiating Brexit continues. There is a large gulf between what the EU seek from the deal and what the UK and Theresa May is aiming for. Overall the picture is a worrying one for the pound with plenty of uncertainty. Any good news will I believe be fairly shortlived and clients looking to buy or sell pounds and Euros should be making plans in advance.
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