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Trade Negotiations and French election crucial to GBP/EUR levels (Daniel Johnson)
Positive Outlook on Trade Negotiations
One of the main factors to Sterling value is trade negotiations following the invocation of article 50. The PM has a very positive attitude as to how trade deals will go. May recently stated Britain will be able to use the blue-print of up to fifty trade deals that are already in place between the EU and others.
Theresa May stated “It will be possible to simply cut and paste deals with countries such as South Korea, Mexico and Jordan.”
May has caused controversy of late, claiming the negotiations could take longer than the current two year target. This should not be too much of a surprise. Head EU ambassador, Sir Ivan Rogers recently resigned stating that the two year target was unrealistic.
Some negotiations could take longer than expected, but I am still of the opinion the pound is undervalued against the Euro. There will be spikes and troughs as always, but I think the pound will rally slowly and steadily.
French Election has potential to substantially weaken the Euro
Marine Le Pen, the head of the National Front has a real possibility of winning the presidential election. She is currently second in the polls, behind Macron. It is important to consider the silent vote however. There are many with strong opinions on immigration, scared to voice their opinion in case of being deemed racist. slipping a folded piece of paper in a ballot box does not create the same problem.
If Le Pen gets in there is potential for significant Euro weakness. She plans to ditch the Euro and leave the EU.
If you have a currency requirement and would like my assistance please do get in touch. I can be contacted at [email protected].
Source: http://www.eurorateforecast.com/2017/04/07/trade-negotiations-and-french-election-crucial-to-gbpeur-levels-daniel-johnson/
