It’s been a fascinating week for GBPEUR exchange rates due to the political events that have unfolded in the UK. Last week all eyes turned to the Cabinet meeting chaired by the Prime Minister and the 500 page draft agreement. As we were expecting, the draft agreement was received with a mixed reception. Dominic Raab the Brexit secretary at the time was furious with the Prime Minister therefore he saw no alternative other than to resign which caused the pound to take a tumble against the euro. Other resignations followed and reports of a vote of no confidence have continued to rise.
Over the last 7 days the pound has fallen 3 cents against the euro. To put this into monetary value a €250,000 property purchase will now cost clients £5,700 more now compared to this time last week.
The Brexit negotiations will continue to drive GBPEUR exchange rates this week and in particular if Conservative MPs file a motion of no confidence. If this occurs you would expect the pound to continue to lose value against the euro as focus will drift away from leaving the EU and onto the leadership within the UK.
In other news, today hundreds of British business leaders will gather at the CBI conference in London to talk about Brexit and the future direction of the economy. It will be the first time the PM directly pitches business leaders in regards to her Brexit plan. If business leaders leave the meeting frustrated and wanting change, I would expect further pressure to mount on the PM and that would be last straw and a vote of no confidence would follow.
For clients that are buying euros there is still scope for exchange rates to fall a few more cents as it was only 8 weeks ago when GBPEUR dropped below 1.10. For clients buying euros short term, eliminating risk would be my suggestion therefore I would purchase sooner rather than later. For more information in regards to Brexit and potential currency fluctuations feel free to email me on email@example.com.