In my latest Euro Pound forecast, we’ll look at how the Pound has continued to sustain losses today against the Euro. At this moment of writing, Sterling has reached a low on the interbank exchange rate of 1.1178 or inversely 0.8946. This is great if you are selling Euros, but not so favourable if you are looking to buy Euros.
The UK’s Public Sector Net Borrowing figures for May, released this morning, came in higher than expected at £4.46 billion versus a forecast £3.3 billion. The inability of the government to balance its budget amidst the ongoing Brexit saga is a clear worry for the market and the value of the Pound.
Meanwhile, the Euro gained value this morning, as French and German manufacturing data came out better than expected. France came in at 52.0 versus a forecast 51.0, and Germany 45.4 against a predicted 44.6. While the Eurozone’s Manufacturing PMI for June came in slightly weaker, both IHS Markit’s Eurozone Composite PMI and Services PMI for June came in slightly better than expected.
Should I wait to buy Euros?
The Irish Prime Minister Leo Varadkar has indicated that a Brexit ‘no deal’ could be the likely path and any further extensions to the current deadline of the 31st October 2019 are unlikely.
The Governor of the Bank of England, Mark Carney, has rejected Boris Johnson’s claim that the UK can avoid trade tariffs if the UK follows through with a no-deal Brexit. While Mark Carney has indicated the dangers of a no-deal Brexit, Boris Johnson has repeatedly stated the UK must leave the EU at the end of October, with or without a deal. It is thought that only 40% of UK businesses are prepared for a no-deal Brexit. This means that, in the event of a no-deal, it could hit the UK quite hard and hence the value of the Pound.
In the near term, while we wait for confirmation of the next Prime Minister and ongoing uncertainty surrounding Brexit, we could see the value of the Pound continue to weaken. To discuss how I can assist and keep you abreast of ongoing market movements and economic information, please feel free to contact me directly here.
If you do not have the funds available now, we can always secure your currency on a forward contract. This allows 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.