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After the shock news that Theresa May would hold a general election on the 8th June we saw GBP/EUR jump from the high 1.17s to end the day in the high 1.19’s. U.K. Prime Minister Theresa May appealed to millions of voters to strengthen her position in Brexit negotiations by backing her Conservative Party as she sought approval from lawmakers for an election on the 8th June.
Usually after a movement like this we would see some sort of natural correction, in fact the pound managed to hold on to the gains it had made, remaining within a 50 pip range throughout yesterday’s trading session. George Saravelos at Deutsche bank believes that the exchange rate is no longer likely to fall to parity as the recent shift in the UK political landscape represents a positive outcome for the pound.
So will we see the rates over 1.20?
Whilst we have seen a decent gain for the pound it is unsure whether this trend will continue. Brexit negotiations will still play a huge part and the more of an understanding to what Brexit truly means will surely have an effect on the pound’s value. Saying that, the first round of the French elections is on Sunday, if we see Le Pen get through the 1st round we could see the Euro stumble as a result.
It is also worth mentioning that since the UK decided to leave the EU (European Union) last year we have only see these levels a handful of times. If you have a requirement to purchase euros in the coming months it could be worth taking advantage of these movements.
GBP/EUR 3 month exchange rate graph
What does this mean to you?
When looking to purchase an overseas property the exchange rates can play a huge part in what you can afford to buy. With the increasing uncertainty it’s imperative to keep in touch with an account manager at Foremost Currency Group. We will listen to your requirement, explain the services and tools that we have to offer and then put a plan together to make the most out of your currency purchase. Get in contact on the details below for a no obligation discussion with one of our expert currency brokers.
Another slow day in terms of economic data, the only data to note from the UK is a speech from Gov Mark Carney at 16:30. Any hints on future monetary policy could move sterling crosses. Over in the Eurozone the Germans have their PPI figures (Producer Price Index) and the Spanish have their 10-year Bond auctions. Across the pond the US has their Unemployment claims.
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