The UK's decision to withdraw from the EU spells uncertainty ahead, the Euro has gained 10% in the early hours of the morning.
The Euro has made sharp gains against the pound on the news that the UK is set to leave the EU. The Euro gained almost 10% in the early hours of the morning. Leaders across Europe will be meeting today to discuss what will happen next on the back of the UK leaving the EU. One thing to note, the UK is not set to leave the EU yet. The government has two years to get a plan in place regarding leaving the EU and the government in the UK could still overturn the decision and put the vote to the MP’s.
In my opinion, this would be a very risky move from the UK government and could lead to revolt from the British people.
One question is will the Euro survive now the UK is set to leave the EU. I personally believe that Germany will now be asking questions of their membership within the EU. Will other nations in the Eurozone want a similar referendum?
Long term analysts are predicting that GBP/EUR is likely to drop to around 1.10-1.15. Investors are likely to move any investment from the pound and into safer currencies, which could see further sterling weakness and presents clients looking to buy sterling with euro’s with some excellent opportunities.
With sterling weakness predicted for the short term due to the uncertainty surrounding the future of the UK, it may be a sensible time for people to buy their Euros now while rates are still above 1.20. I don’t think I’m alone in voicing that people will be glad to have a break from hearing about the referendum! It would be a sensible move in my opinion to be in close contact with your account manager today. The markets are expected to be highly volatile whilst the investors try to make sense of the UK leaving the referendum.
The UKs withdrawal from the EU is likely to have further impact on GBPEUR rates in the weeks to come. Call our trading floor on 01494 725 353 or email me here in the event you have currency exchange needs.
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