Will the Pound rise or fall against the Euro in the coming weeks? Most of the GBP/EUR movements will now hinge on the Brexit negotiations and the outcome of the French elections later this month.
Since the UK public decided to vote out of the European Union on June 23rd, hard or soft Brexit has been on the tip of all politicians tongues except the UK Prime Minister as she believes there is no such thing.
However Mario Ohoven the boss of BVMW, an organisation set up and helps over 270,000 small to medium businesses in Germany believes a hard Brexit, where the UK cannot trade within the single market would harm the EU and in particular Germany just as much as the UK.
Mr Ohoven has a different approach from German politicians as they including Chancellor Angela Merkel, have stated the UK will not have access to the single market unless the UK continue to have the free movement of people.
UK Prime Minister has also stated she will not seek membership of the single market however wants a deal that will work for both parties.
In a recent interview with the BBC Mr Ohoven stated ‘Germany exported goods worth €89bn Euros to the UK in 2015, almost half of it was by 150,000 German small businesses’. If this relationship dissolves this would have a detrimental impact on these small businesses and for that reason I believe an agreement will be reached as the EU need the UK as much as the EU need the UK.
I am in no doubt overtime Sterling vs euro exchange rates will rise and fall because of Brexit negotiations. However short term (next two months) rates for purchasing could improve due to the French Election. Marine Le Pen leader of the National front party has been gaining momentum in recent weeks due to her anti EU stance. Past history tells us elections cause volatility for the currency in question and if Le Pen does manage to get through the first round, EU leaders will be panicking that another referendum in regards to EU membership is on the horizon. For Euro sellers short term, rates of exchange have been strong for buying Sterling for some time and taking advantage may be wise.
With a shorter week due to the Easter Bank holiday, data releases are light however the key releases to look out for are industrial production numbers and economic sentiment numbers both released Tuesday at 10am.
If you have an upcoming Euro buying or selling requirement, be sure to detail this to your account manager ahead of the French elections by calling 01494 725 353. Alternatively you can email me here if you have any questions about this report.
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