In the past week there have been a number of major financial institutions predicting that the Pound to Euro rate is likely to hit parity next year, meaning a 1 for 1 exchange at the inter-bank level, with some even forecasting that GBP/EUR could fall below this mark.
HSBC are backing further Euro strength and think that if the European Central Bank (ECB) continue to avoid commenting on the recent bout of Euro strength, this could give the Euro the green light to continue its strong run as it appear that the ECB aren’t concerned by the strength of the Euro.
HSBC are also predicting further gains for the EUR to USD exchange rate so it’s not just Sterling strength that could push GBP/EUR lower, but Euro strength.
These comments from the major bank come shortly after similar ones from Morgan Stanley. Just yesterday a report on the BBC reported Morgan Stanley’s predictions of Sterling weakness in future without the headline topic being that the GBP/EUR rate could drop below parity for the first time ever in 2018.
These predictions are both longer term with next year being cited as the time when GBP/EUR could see parity, and at the time of writing the pair are trading just over 1.10. Later this morning there will be the release of inflation data which is likely to be keenly watched as those hoping for a boost to Sterling’s value will hope for a high figure resulting in talk of an interest rate hike from the Bank of England, which would be Sterling positive.
If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on email@example.com and I will endeavour to get back to you as soon as I can.