This Thursday is the key day which has the potential to have a major impact on GBPEUR exchange rates as the European Central Bank will release their latest interest rate decision and MPs within the House of Commons will debate if the UK should remain in the customs union.
In regards to the interest rate decision, interest rates will be left on hold which doesn’t come as a surprise. However it will be President Mario Draghi’s speech that could dictate the strength of the euro. It’s been heavily publicised that the Euro had a strong 2017 and the ECB were hinting that the quantitative easing program could come to an end at the of the year. However as inflation is falling in the eurozone and global tensions rise due to trade wars, some economists are suggesting that the QE program could overrun. Draghi’s tone will be key and should be watched closely if transferring euros in the future.
Across the Atlantic, UK Prime Minister Theresa May has a dilemma on her hands. The House of Lords last week voted in favour of remaining part of the customs union and now this is set to be debated in the commons. She is stuck between a rock and a hard place as MPs are split whether we should leave or remain and the customs union also will impact the Irish border deal. This story in the upcoming weeks has the potential to have major repercussions on sterling exchange rates as this story will have a major influence on the final deal the UK will receive. Personally with the pound gaining momentum since the start of the year against the euro, in my opinion this is worth taking advantage of now before the Brexit trade negotiations heat up.
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