Pound to Euro forecast weaker – May officially resigns

Today Theresa May officially resigns from her role as Prime Minister adding further uncertainty to the market until her successor is elected. Boris Johnson is still the bookies favourite to win the position of Prime Minister and we have seen his odds increase over the last week. Depending on the results of the next Prime Minister and their views, will determine where the pound/euro exchange rate moves next.

The Labour Party surprised the market today by winning the Peterborough by-election, as it was widely expected The Brexit Party to win. The Labour Party won 31% of the votes, shortly followed by The Brexit Party with 29%, and the Conservatives coming in 3rd with 21% of the votes.

Euro weakness

The eurozone is struggling with weaker growth and low inflation. If we see the European Central Bank enter another round of stimulus, this could see the value of the Euro weaken.

Another reason we could see the euro weaken is with regards to Italy’s debt position. This is a concern for the EU as their deficit continues to grow and expected to rise over 135% of Growth Domestic Product by 2020. The fallout from this would spill over into other EU countries and adversely affect the bloc as a whole and no doubt the value of the euro.

The pound is likely to be volatile in the near term and could jump in value very quickly. To discuss how I can assist and keep you abreast of market movements and economic information, please feel free to contact me directly here.

If you do not have the funds available now, we can always secure your currency on a forward contract allowing you to secure an exchange rate today for a future payment. This requires a 10% deposit with the balance being paid on a date of your choice up to one year ahead.