How will Sterling Euro Exchange Rates React to the EU Deal? (Tom Holian)

After some tough days at the EU summit a deal has been reached late last night to keep the UK in the European Union with the UK achieving many of its goals.

All of the member states were in agreement that they wanted to keep the UK in the EU and the result was seen as positive for all parties involved.

According to PM David Cameron the EU deal gives the UK ‘special status’ and that ‘we have permanently protected our Pound and our right to keep it’.

The impact I expect this to have on Sterling exchange rates is a positive one and I think we’ll see this happen in early Monday morning trading with GBPEUR and GBPUSD as the currency markets open.

With Sterling Euro exchange rates having dropped by as much as 10% since December the fears of a Brexit have been weighing heavily on Sterling which has been a big factor in the currency movement.

With a deal having been agreed now this will surely provide the Pound with a huge amount of confidence.

If we turn the focus back towards economic data releases for both the UK and Eurozone the biggest day for volatility will be on Thursday as the UK announces GDP closely followed by the Eurozone’s release of inflation figures.

I expect Eurozone inflation to have a big influence on GBPEUR rates as this will have an impact on the European Central Bank’s decision as to whether or not they will look at further QE in March.

My expectation for Sterling vs the Euro is for the Pound to stage a fight back against the single currency next week as with the EU deal now sorted attention will turn to how both areas are performing economically without the political uncertainty of this meeting looming over the rates.

Therefore, is you need to sell Euros it may be worth taking advantage of these recent 12 month lows before the Pound starts to recover. 

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian [email protected]