The Euro has performed well against the Pound since the beginning of the year, with GBP/EUR exchange rates falling by 2 cents to 1.164, a marked improvement since before Christmas when rates were above 1.19. However these gains could be short-lived as Theresa May has spoken for the first time this year, stating that she will begin to release more details on how she plans to go about her Brexit negotiations over the coming weeks.
So far these details have been kept behind closed doors, but with these announcements combined with the decision from the Supreme Court on whether she can invoke Article 50 without the assistance of Parliament due any time this month, things should start to become clearer very soon. We haven’t been informed of a date for the Supreme Court decision, but there is speculation that this will be between 12th and 17th January.
If Theresa May loses her appeal to invoke Article 50 alone, it is likely that a Soft Brexit would be the scenario, and I would expect GBP/EUR rates to rise with investor confidence. However if she wins, she will almost certainly invoke Article 50 by the end of March and begin the process of a Hard Brexit, which could cause GBP/EUR exchange rates to plummet. The outcome really could go either way, therefore clients with a EUR requirement could benefit from one of our many contract options designed to remove the uncertainty surrounding a currency purchase.
There is little Economic data released early this week for the Eurozone until Thursday when the European Central Bank will release their Monetary Policy accounts. This will be eagerly anticipated by investors as the report provides a complete overview of the economy and financial market. It should also provide insight into future monetary policy changes, which could cause swings on Euro exchange rates.
Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me directly at email@example.com.
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