If you’re searching for a Pound v Euro forecast, it will interest you to know that the Pound has found some stability so far this week, following a volatile end to last week.
Ten Conservative Party leadership candidates were finally whittled down to two, with outsider Jeremy Hunt and frontrunner Boris Johnson both looking to secure the top job. They will now spend the next three weeks contesting to become the British Prime Minister and, with it, the responsibility for leading the UK out of the EU.
They will be doing their utmost to convince the 120,000-plus Tory members. Boris Johnson seems the one destined for the job. If the polls are to be believed, just a week ago his chances were calculated as high as 92% odds on. However, the odds were narrowed by claims made against Boris’ private affairs over the weekend, and his chances have now narrowed to 72%.
This is still a lead I am sure that Boris will be happy with. Meanwhile, Jeremy Hunt will be gaining confidence that he can keep the momentum going and gain an edge in the race to Number 10.
Euro rate prediction: Pound resists further losses
The Pound has spent the majority of June losing value against the Euro. However, in the last few days the currency has resisted further losses. Today the rate has moved within a small range between 1.1214 and 1.1152. The Pound found some support in last Thursday’s comments by the Bank of England (BoE) and Governor Mark Carney.
These comments were far less dovish when compared to messages received recently, from the European Central Bank (ECB) and the US Federal Reserve. While there was no talk of an interest rate rise by the BoE, in comparison the ECB has recently opened the door to rate cuts and more stimulus. This is to counter the Eurozone’s economic slowdown and increasing debt levels.
UK retail sales contract at fastest pace since 2009
Proving how much of knife edge the UK economy is on at present, data out earlier today showed that UK retail sales volumes contracted at their fastest pace since 2009. The Confederation of Business Industry reported that the cooler weather and Brexit stockpiling are the reasons for the slowdown.
Despite the UK economy performing reasonably since the worries of Brexit, more difficult times may not be too far away. There is a greater risk the longer that Brexit remains at deadlock.
Although it is evident that the Pound has continued to suffer this month, the pace of its losses has lessened compared directly to last month. Most of the attention is likely to continue to be heavily focused on the Prime Minister’s contest and what it means for Brexit, as the next deadline on 31st October approaches.
When to buy Euros: Boris “serious” about ‘no deal’
Boris Johnson has repeatedly stated that he is “serious” about leading Britain out of the EU in October without a deal, if the bloc refuses his demands to renegotiate a new exit agreement. However, there are important heads within the EU that openly blamed Boris Johnson for Brexit in the first place.
In my opinion, I think Boris will be performing a miracle by getting the EU to renegotiate with him and agree a deal, then get it passed through the House of Commons in the space of two months. This is considering that Theresa May failed in her task to achieve the same in three years.
Either another Brexit extension or leaving without a deal remain strong possibilities. Until the outlook starts to look a little clearer, it is going to remain difficult for the Pound to stabilise and have a chance to see the rate improve against the Euro.
Feel free to contact me directly if you’d like to discuss these factors, and the potential impact they could have on your currency transfer. You can email me directly here.