The Pound gained against a basket of currencies yesterday, with one of the biggest gains made against the Euro.
Theresa May provided some much need clarity in her speech yesterday, and in doing so helped the Pound to make up some much needed ground against the Euro. Since the beginning of the year, the Euro has been making inroads against Sterling. In fact, clients looking to repatriate €200,000 back into Sterling would have gained an extra £5100 this year.
However, the tide appears to have changed (at least for now) with Sterling gaining nearly 1.8% against the Euro in the matter of hours. The reason for this that Theresa May appeared to outline a clear plan and vision for the UK regarding leaving the EU. However, Downside risks to Sterling and also history over the past 7 months, since Britain voted to leave the EU have showed us any gains can quickly be undone. If you are looking at buying Euros with Sterling, it may be wise to move on any spikes quickly. I still believe that there will be many twists and turns yet to come.
Germany’s Foreign Minister Frank-Walter Steinmeier, who advised that it provided ‘a bit more clarity’, however negotiations would not begin until Article 50 had been triggered. This is still expected to happen in March.
Economically, attention is now focused on tomorrow’s ECB interest rate decision and subsequent Monetary Policy Statement and Press conference.
Although it is expected to be a non-event, it will be interesting to see if there are further decreases in the amount of quantitative easing the ECB is currently distributing. Recent rises in inflation across the Eurozone mean this is a distinct possibility, having announced on the 8th December that as of April the QE programme will be tapered from €80bn a month to €60. If this does happen, I would expect the Euro to benefit as a result.
A well timed transfer could make a huge difference to your currency exchange requirement, staying in touch with your dedicated broker during periods of volatility could help you make an informed decision. Call us on 01494 725 353 or email me at firstname.lastname@example.org if youd like to speak to one of us about a transfer.
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