Pound to Euro exchange rates rise off the back of Chancellor Hammond Autumn statement

The Autumn statement was always going to attract the crowds as Chancellor Hammond gave direction for the UK economy in the anticipation of Brexit in the upcoming months. Growth forecasts were cut however the Chancellor did state the IMF believe the UK and Germany will have the same amount of growth and the UK will outperform countries such as France and Italy. Off the back of the news the pound climbed against the euro by 0.85% and reached the 1.18's.

Pound to Euro forecast for the remainder of the year

Only 4 weeks ago many of the UK leading banks were predicting Pound to Euro exchange rates would continue to fall and reach parity in 2017. Since the High Court ruled Theresa May doesn’t have the power to invoke Article 50 on her own and Donald Trump won the race to the White House, GBP/EUR exchange rates have surprisingly risen 7 cents. In monetary terms a €200,000 purchase is now £10,650 cheaper.

For Euro buyers the crystal ball question that many of my clients are asking is will rates continue to rise or is this a temporary spike in the market?

Looking ahead the next major announcement to look out for is the possibility of an extension to the ECB quantitative easing program. Earlier in the week two of the top ECB officials including the President Mario Draghi stated the ECB need to continue supporting the Eurozone economy with its ultra-loose policy cementing expectations that an extension will occur on December the 8th. When the ECB introduced the Q.E program back in March 2015 the euro dramatically devalued and an extension could have the same effect.

With it looking like many of the leading banks have got their forecasts wrong I expect Pound to Euro exchange rates will remain in the higher teens and potentially break through 1.20 if and when the ECB extend the quantitative easing program. For clients repatriating euros before the turn of the year I would recommend getting in touch with your account manager to discuss the options available to you.

With the above in mind, Clients looking to buy or sell the Euro could benefit from talking through a currency requirement with one of our brokers. Call our trading floor on 01494 725 353 or drl@currencies.co.uk.


Read more articles
Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.