The Pound to Euro exchange rate broke above 1.10 yesterday afternoon for the first time this month, as the pair has been lodged below this key trading level since the end of July. The reason behind the boost to the Pound’s value is due to the outcome of the meetings between UK Prime Minister Boris Johnson and EU leaders such as German Chancellor Angela Merkel and French President Emmanuel Macron.
Angela Merkel has challenged Boris Johnson and his government to come up with new ideas for the Northern Irish backstop. This is a promising sign as, previously, EU leaders have suggested that there is no scope for amendments to the arrangements put in place by Mr. Johnson’s predecessor, Theresa May. Sterling has been under considerable pressure recently as the chances of a no-deal Brexit have increased, since Boris Johnson took on the role of Prime Minister.
As there are no key economic data updates today due out of the UK or the EU, I expect the political situation to remain the key driver of currency values. At the time of writing, the GBP/EUR rate remains just north of 1.10, after hitting highs of around 1.1060-1.1070 yesterday afternoon.
Euro forecast for next week
At the weekend the G7 meeting will take place, and also Mark Carney, the Governor of the Bank of England, will be speaking at the Jackson Hole Symposium. I think this is another area to watch, as there could be currency movement off the back of any comments alluding to future monetary policy plans.
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. 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 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 protected] and I will endeavour to get back to you as soon as I can.