Since the start of the summer GBPEUR exchange rates have dropped over 6 cents which makes a €200,000 purchase £9,400 more expensive. Brexit headlines continue to devalue the Pound as a the likelihood of no deal scenario appears to increase, according to the media. The latest updates on Brexit commentary and the impact on Sterling Euro rates are discussed below; the table displays the range of exchange rates for the past 30 days, showing the potential difference in Euros you could have achieved when buying £200,000.00.
|Currency Pair||% Change||Difference on £200,000|
Emmanuel Macron has made it clear that he believes honouring a bespoke deal with the UK which doesn’t include the free movement of people could unravel the European Union. Therefore the deal that the UK are offering at present does not meet the needs of Europeans. It’s extremely difficult to second guess the outcome of the Brexit negotiations, however my personal opinion is that a deal will be reached towards the end of the year, which will significantly strengthen Sterling and I also believe the UK would hold a general election before we see a no deal. As I have stated, it’s difficult to predict the final outcome and economists are split in regards to the final outcome. What we do know for a fact is that GBPEUR exchange rates have dropped 19% and the question I would ask my clients that are selling Euros to buy Pounds, is why gamble as this is a fantastic opportunity in my opinion. For example a €200,000.00 property sale converted now compared to Pre Brexit would generate clients an additional £29,000.00.
There are a few key data releases to look out for this week if you are involved with a Euro currency transfer. Wednesday at midday, Germany are set to release their Harmonized Index of Consumer Prices which measures price stability. The number is set to fall slightly to 2% which could devalue the Euro slightly however I expect investors will want to wait for Friday’s unemployment rate and Consumer Price Index numbers.
For many years it’s been heavily publicised that European unemployment is high but on Friday we are expecting to see unemployment fall from 8.2% from 8.3% which is good news for Euro sellers.
The consumer Price Index numbers are set to remain at 2.1% and if this materialises I expect the Euro will strengthen as inflation is remaining above the ECBs target even though they are tapering the QE program and that it’s coming to an end at the turn of the year. If I were selling Euros short term I would hold off until Friday.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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