Is now the time to sell euros and buy pounds?

In recent weeks the pound has been edging higher against the euro but it’s important to understand that the euro is performing well against most G10 currencies, however the pound is slightly out performing the single currency.

This weeks round of economic data releases helped the pounds value once more, as  UK GDP and Average Earnings numbers exceeded expectation. Growth and average earnings has been a worry for the Bank of England. Forecasters had suggested that growth numbers would continue to decline due to the slowdown after Brexit and uk inflation would outpace average earnings.

Inflation continues to outpace average earnings however forecasters are suggesting the boost in the pounds value this year will cause inflation to fall back towards 2.5% throughout the year. Since the numbers were released in the week the futures market is predicting a 50% rate hike in May and a 80% chance of a hike by November by the Bank of England.

In regards to Brexit, key figures from Europe have announced what they think should happen when the UK departs the EU. Last week French President Emmanuel Macron told the BBC that he believes the UK can have a special trade relationship with the EU and this wee German Chancellor Angela Merkel speaking at the Davos summit gave hope to UK businesses when she explained she wants to keep the UK as close to the EU as possible post Brexit.

The pound was making inroads against the euro and GBPEUR exchange rates broke through 1.15, however ECB President Mario Draghi stopped the run for the pound against the euro at the ECB interest rate decision when he gave his bullish speech about the European economy.

As stated above both economies are performing well at the moment however I expect overtime the pound to continue making inroads against against the euro. Therefore if you are selling euros to buy pounds I would look to make this transfer sooner rather than later.

If you are buying or selling euros this week, month or year and I have not covered the currency pair you are trading, I would recommend emailing me with the currency pair (EURUSD, EURGBP, EURAUD) and the reason for the transfer (company goods, property purchase) and I will response with my forecast and the options available to you [email protected]. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **