Pound/Euro near 2 year high – We have seen the Pound go from strength to strength over the last few weeks, rising from a low of €1.10, reaching a high of €1.16 overnight before dropping back away.
Why has the Pound risen so much?
There are 2 reasons for the recent gains. The first has been covered this week on this site already; Brexit. Markets are now almost certain that one of 2 things will happen within the next few weeks. Either May’s deal will now finally get voted through, if the EU make changes to the Back Stop that can be accepted by the DUP and Brexiteers. They have indicated that they will now support May, and that’s the main reason for this surge. Even if they don’t, it’s likely the process will be delayed until the end of the year, in order to get a deal everyone can agree to.
Euro weakness also a factor
The second reason is Euro weakness. Yesterday the ECB signalled that further stimulus may be required in the Eurozone in order to tackle inflation and growth. The German economy, the EU’s largest, are experiencing a downturn and the EU economy as a whole is not doing very well. This means that further stimulus may be needed and this news has weakened the Euro, making it cheaper to buy.
These 2 factors combined have helped push GBP/EUR rates to the highest we’ve seen since May 2017, almost 2 years ago.
How to take advantage of the current levels
Today we are seeing clients take advantage of the recent gains by using a ‘Forward Contract’. This is where you can freeze the current rate for up to 2 years, protecting against the rate dropping back away. You pay a small deposit and your rate is guaranteed.
A typical overseas property purchase of €300,000.00 is £13,000.00 cheaper today than just 2 weeks ago. This shows how important getting the best exchange rates is when converting a large sum. Get in touch today to see how we can help with your currency needs, and get a quote.