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Brexit is causing a problem for the pound but not the euro (Dayle Littlejohn)

Friday, March 10, 2017 2:33
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(Before It's News)

Since the Great British public decided to vote out of the European Union on the 23rd June 2016, GBPEUR exchange rates have dropped 16 cents (12%). To put this into monetary terms a €200,000 purchase now compared to 22nd June would now cost the purchaser £21,250 more and I wouldn’t be surprised to see rates get worse for euro buyers short term.

European Central Bank President Mario Draghi, addressed the public yesterday and confirmed Brexit has not had an impact on the Eurozone economy so far. He went on and gave a fairly bullish speech indicating that low inflation had not come to an end, but he was pleased the Quantitative Easing program is having a positive impact.

With Theresa May likely to trigger Article50 at some point towards the end of this month, I expect the pound is going to fall further in value against the euro and potentially to levels we became accustom to in October 2016 (1.10-1.12). For any euro buyers short term, I have been stating in my recent articles the pound would lose value this month and so far GBPEUR has dropped 3%. The safe option is to buy upfront by using one of our forward contracts, which allows you to secure the exchange rate now but pay later.

For Euro sellers the two options available to you would be to secure rates off the back of the spike, if you are not prepared to take a risk, or sit back until Theresa May triggers Article50 and then re asses your position. Either way i would recommend you outline your position to me and I will keep you up to date with regular market information that could impact your exchange rate.

If you are trading another currency pair that I have not covered, feel free to email me with the pair (GBPUSD, GBPAUD) the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with my forecast and the process of converting currency. My direct email address is drl@currencies.co.uk and I look forward to receiving your email.

If you are buying or selling euros in the upcoming weeks and are looking to achieve competitive rates of exchange whilst receiving regular economic information feel free to email me with your requirements or call the trading floor on 0044 1494 787478 and ask for Dayle Littlejohn.



Source: http://www.poundsterlingforecast.com/2017/03/10/brexit-is-causing-a-problem-for-the-pound-but-not-the-euro-dayle-littlejohn/

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