| Story Views | |
| Now: | |
| Last Hour: | |
| Last 24 Hours: | |
| Total: | |
Pound to Euro rate falls owing to Brexit issue and Inflation concerns (Tom Holian)
We have seen the Pound to Euro exchange rate start to fall away again after the problems caused by the Brexit uncertainty and the Quarterly Inflation Report at the end of the week.
Although the UK growth forecast was upgraded Bank of England governor Mark Carney has stated that the central bank is worried about falling inflation which means there is now much less chance of a UK interest rate hike coming in the near future.
This has caused investor confidence in the Pound to fall and seek out higher yielding currencies including the Australian Dollar and New Zealand Dollar which improved by 2% against Sterling at the end of the week.
The real concern for the Pound is that we are still not much closer to knowing exactly when Article 50 will be triggered and the next steps involving the divorce from the European Union.
There are fears that we could lose access to the single market and although many senior politicians have said that we’ll look at renegotiating the terms this could cause some real problems for the British economy and that is what is negatively affecting the value of Sterling exchange rates against all major currencies.
We did see some small gains for the Pound earlier in January when Theresa May took more control of the issue by announcing that she would seek parliamentary approval which meant that the Supreme Court verdict was not as important but until we get some form of certainty I think the Pound will struggle to make any significant gains.
Indeed, UK GDP only last week showed an improvement and with growth forecasts having been raised then typically we should expect the Pound to have improved against the Euro and US Dollar but owing to what is happening politically we are set to remain in a volatile market with GBPEUR & GBPUSD movements caused primarily by the Brexit negotiations.
There is little economic data of note either in the UK or the Eurozone next week so the rate movements for Sterling will remain affected by the political landscape.
Therefore, if you have a currency requirement to make in the next few weeks whether buying a property in Europe or sending money back to the UK then it may be worth considering buying a forward contract which allows you to fix an exchange rate for a future date. This can be especially useful if you’re on a tight budget or simply want to avoid the risk of the market moving against you.
I have worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers and I’m confident that not only am I able to save you money on exchange rates but also help you with the timing of your transfer.
For a free quote then contact me directly via email. Tom Holian [email protected] or simply fill in the form below and I look forward to hearing from you.
[contact-form]
Source: http://www.poundsterlingforecast.com/2017/02/04/pound-to-euro-rate-falls-owing-to-brexit-issue-and-inflation-concerns-tom-holian/
