The pound to Euro rate remains above 1.10 but this level could easily be compromised as it was on Friday. Despite the UK putting forward some excellent economic data the pound has struggled owing to the political and economic uncertainty of what Theresa May’s plan will entail. There are a number of options any clients looking to buy or sell Euros should be considering, usually it is only when exchange rates start costing people money they really start to pay attention.
With GBPEUR having slipped on sterling fears the rate has already broken 1.10 this month and could drop further. The UK economy is now in a very precarious position with UK politicians themselves very worried and concerned with what is lined up next. Theresa May has stated that the UK is seeking what is termed a ‘hard’ Brexit and this will cost UK businesses money through the loss of trade with the Eurozone.
It is worth stating nothing will happen quickly and nothing will change until 2019 or the date at which the new agreement comes into force. Sterling has suffered as big institutional investors previously backing the pound take refuge selling off their sterling positions. The lack of agreement or accord with the Eurozone and EU partners has dealt sterling a damaging blow as all the worst fears of Brexit slowly come to fruition.
Understanding your options is key to navigating this uncertainty. For a small free we can reserve current rates now for payment in the future. ‘Why reserve when rates are so low’ I hear you cry? Well most of the major banks are now all predicting rates between 1.08 and 0.95 for the coming months. Any buyers of Euros scoffing that this will not happen might be wise to consider how many forecasters did not predict rates this low when Brexit was first announced.
If you need to buy or sell currency we can fix rates for up to 18 months in the future for both buyers and sellers. whether rates go up or down is irrelevant, it is the certainty such a contract provides which should be the main reason to lock in. Indeed we are very popular with these deals for both buyers and sellers.
Making plans in advance will cost nothing but your time but may well save you thousands in your currency plus hours of pain and worry down the line. For more information please speak to me Jonathan on email@example.com or call 01494 787 478 in UK business hours.
The author is Chief Analyst and Associate Director at one of the UK’s largest, privately owned FX brokerages.