Weaker than expected UK inflation at 1.6% published yesterday morning saw the rate to buy Euros with Pounds fall marginally. Although the figures were the best in almost three years they were still lower than the expectation of 1.8% and this caused the Pound to fall.
One of the ways to combat increasing inflation is to look at raising interest rates so to see a fall yesterday means there is less likelihood of an interest rate hike coming soon for the UK.
The Pound is still being negatively affected by the ongoing concerns as to what will happen with Article 50.
Brexit secretary David Davis has claimed that the trigger of Article 50 would be invoked ‘by the end of March, sometime during March.’ Therefore, we are still waiting for an exact date before negotiations can start to leave the European Union and this is causing concern for Sterling.
Interestingly enough the European Union celebrates its 60th anniversary on 25th March so with the UK looking to leave at around this date the meeting is likely to make some headlines with the UK’s absence.
UK unemployment data is due to be released at 930am this morning with the expectation for 4.8%. This is close to the lowest in history and demonstrates how strong the UK economy is performing in light of any ‘Brexit uncertainty’.
However, until we get some form of clarity as to when Article 50 will be triggered and what will happen with the negotiations between us and the continent I think the Pound is likely to struggle against the Euro.
Therefore, if you need to sell Euros to buy Pounds in the short term it may be worth taking advantage of current opportunities.
Turning the focus to Europe the French will go to the polls in April with the final round due in the first week of May and I think the political uncertainty caused by what may happen and who will win could see the Euro weaken against the Pound during this period.
If you need to buy or sell Euros and are concerned about what may happen as we go into what could one of the most volatile periods of 2017 it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date.
If you would like further information or a free quote when buying or selling Euros then contact me directly and I look forward to hearing from you.
Tom Holian firstname.lastname@example.org