The EUR has continued to make strides against GBP this week, with the pair now trading around 1.16 on the exchange. This improvement for the EUR ended Sterling’s mini recovery and as such those clients holding Sterling may have missed their opportunity. The Pound had put pressure on 1.20 only a week or two ago, only to find huge resistance at this level and subsequently the pair has dropped. With the current rates floating just above 1.16 on the exchange, many clients are questioning whether or not the Pound will recover up to, or above 1.20 over the coming months.
Whilst I would never rule anything in the current market, my personal opinion is and remains that sustainable Sterling strength is unlikely. Whilst rates do not move in a straight line the huge amount of uncertainty created by our Breixt decision, is likely to handicap the Pound for the foreseeable future and as such an aggressive move above 1.20 is unlikely.
With poor inflation data and some bleak minutes from the Bank of England (BoE) following their interest rate decision last week, an interest rate cut this side of 2017 is now far more likely and I believe this is being factored in to the current rates. Due to this overriding factor, alongside an extremely fragile UK economy, I would be looking to protect any Sterling position I had and not gamble on an extremely unpredictable market.
Those clients holding EUR should also be wary about assuming the current spike will continue at the same pace. With key elections in France & Germany next year, the political uncertainty is likely to put pressure on the EUR, which could lose value quickly as a result.
If you have an upcoming EUR currency requirement and would like to be kept up to date with all the latest market movement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on firstname.lastname@example.org