Over the last three months GBP/EUR exchange rates have been up and down like a yo-yo. Exchange rates reached highs of 1.2009 and lows of 1.1067. At the time of writing this report central levels are fluctuating just above 1.15. So which way will the rate move next?
As I have detailed in my Sterling report the Supreme Court ruling is set to heavily influence GBP/EUR exchange rates. Depending on the outcome I believe exchange rates will plummet by 4 cents or rise by 2.
Thereafter Theresa May’s March deadline is only two months away, consequently I expect the pound will continue to remain under pressure and the day the UK start the process of leaving the EU exchange rates to fall even further. I believe there is a good chance rates will fall to 1.10.
It may not be all doom and gloom for those buying Euro this year, the Eurozone has problems of its own. The UK are set to be the first country to leave the Bloc and there is a chance this could lead to a domino effect in years to come. I am not saying I believe other countries will leave the EU this year, however there are three key elections in the Netherlands, France and Germany and if a far-right party manages to gain power, further referendums in regards to EU membership would follow. Past history tells us elections cause volatility so expect buying euros could improve throughout the year.
Today the Eurozone are set to release Industrial production numbers and the Monetary Policy Meeting accounts. The yearly and monthly Industrial productions numbers are set to be released at 10am and are both set to show a rise from previous figures which means the euro could make further gains against sterling this morning. Just after midday the ECB accounts will be released which gives an oversight to Monetary Policy and the financial markets. This data release has the potential to fluctuate exchange rates therefore if you plan to buy or sell euros today, get in touch with your account manager before this data release to discuss your options.
Thank you for reading my Euro rate forecast, if you have any questions about Euro exchange rates I would be more than happy to discuss them, please feel free to email me directly with any queries at firstname.lastname@example.org.
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