As predicted in my Sterling section of today’s market report I think we could see the Pound make some gains if the Supreme Court ruling over turns that of the High Court. Most of the foreign leaders across Europe are hoping that the decision does not go the way of the government and are likely to try and make things difficult for the UK in terms of our exit from the European Union. According to some polls (which are not always to be relied upon) 20% of people think that the EU will agree to the Brexit deal that May wants.
However, as highlighted by what happened to GBP/EUR rates following the speech made by Theresa My last week the Pound’s outlook if tomorrow goes the right way is in my opinion looking more optimistic. If you’re worried about what may happen in the next few weeks to GBP/EUR rates then you may wish to consider buying a forward contract, which allows you to fix an exchange rate for a future date for a small deposit.
I also think that once tomorrow is out of the way and UK government is allowed to move forward with the strategy the focus is likely to move back to what is currently happening on the continent.
However, before tomorrow’s important announcement the Eurozone will release both Manufacturing and Service’s PMI data at 09:00am and both are expected to show a rise so if you’re looking at selling Euros to buy Sterling it may be worth looking at doing this today to avoid the uncertainty as to what may happen tomorrow.
Over the weekend European Central Bank president Mario Draghi highlighted that there are still pressures on the economy caused by low inflation on the continent and that risks to the growth outlook remain ‘tilted to the downside.’ Therefore, in line with the central bank keeping rates on hold earlier this month i think it will be al long term before interest rates start rising again.
Pound to Euro exchange rates may strengthen if the Supreme Court rule that Government must conform with Parliament over Article 50. Clients with a Euro buying requirement may welcome the news, so get in touch with your broker ahead of the ruling on 01494 725 353 so they can assist you with a timed transfer.
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