In this Euro forecast, we’ll see how the Pound to Euro exchange rate continues to test the lower levels, with rates sitting at 1.1130. The Pound has now fallen to a 6-month low against the Euro, creating a good opportunity in a reasonably short space of time for those looking to sell Euros to buy Pounds.
Brexit is the main topic of conversation for the Pound once again, as the markets await the announcement of the next British Prime Minister (PM). This announcement is expected to be made on Tuesday 23rd July, and there could be considerable market reaction to any statements made by the incoming PM. Boris Johnson is widely expected to take power, although nothing is certain until the votes of the Conservative Party membership are counted.
Anti-Brexit campaigner Gina Miller has made headlines after writing to the expected future Prime Minister Boris Johnson, stating she will take legal action against the government, should it try to prorogue Parliament to force a ‘no deal’ outcome. The news comes following last week’s developments, when former Prime Minister John Major said he would go to the courts and seek a judicial review to stop Parliament being prorogued.
Should I buy Euros now or wait?
These developments are important as they highlight that the threat of a ‘no deal’ Brexit is becoming increasingly likely to happen. This is expected to cause a damaging outcome for the Pound. The Bank of England have predicted rates below parity for GBP vs EUR in the event of a ‘no deal’ outcome. The markets are already beginning to price in such an outcome, with rates for the GBP vs EUR pair falling to a 6 month low.
The Eurozone continues to battle with weak economic growth and low inflation. Data this week is light, so focus moves to tomorrow’s trade balance figures and Wednesday’s inflation numbers. Any improvement in the data could help support Euro exchange rates. However, judging by the recent language from the European Central Bank, using its own forecasts, the data is unlikely to impress.
For more information on Sterling to Euro exchange rates, either buying or selling Euros, then please make contact with me, James Lovick, at firstname.lastname@example.org