Since the Referendum last year the fortune of the Pound has been heavily tied to the political situation and the Brexit backdrop, which is why there is little surprise that until we have a formal Government arrangement in place following the inconclusive election, buying and selling Euro rates have been largely stagnant until news emerges.
The only variable for GBP/EUR since election day results came in and the Pound saw a tell-tale slump was the conflicting saga on interest rates.
The Bank of England Governor Mark Carney has been staunchly against the idea of a hike, and his choice to vocalise this at the recent Mansion House conference saw the Pound backtrack by 0.7 cents. Yet he has faced rebellion from some members of the 8-strong Monetary Policy Committee who wish to see an interest rate hike in the UK. They argue that concerns over price rises and fair optimism towards the UK’s economic performance warrant such a step.
This changing dialogue explains the oscillating moves on GBP/EUR between 1.1290 and 1.1420 over the past few weeks. Yet we are expecting conclusions to the political stalemate next week.
Markets are hungry for news. What is going to be in the content of the deal with the DUP? What, if any changes will be made on the UK’s stance towards a harder or softer Brexit?
The fact that any resolutions seems likely to help the Pound given the hints noted recently on currency markets should be in the forefront of anyone with a Euro requirement’s thought process. The question at this point arguably is just how much the Pound will rise up against the Euro next week, and not if.
The variance will likely depend on the support the Government receives for its agenda, and the content of the Brexit aims. David Davis, the Brexit Secretary, has already said concessions would have to be made.
With this is mind it seems Euro sellers face a higher level of urgency next week, and I would be looking to move sooner rather than later. The vote itself will occur through Thursday and Friday. You can contact me over the weekend whilst markets are closed on email@example.com to discuss how to secure a commercial rate of exchange far any imminent or indeed future transfers whilst selling rates are still close to the best levels available since the turn of the year.
Conversely, Euro buyers do not seem to have the same urgency. I strongly recommend that if you have a currency requirement to buy Euros to contact me again on firstname.lastname@example.org to discuss a strategy for your transfer aimed at maximising your Euro return.
I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you a significant sum on a prospective transfer.