After trading in a flat range of €1.26 to €1.27 all month, last night we saw Sterling strengthen after betting odds from BetFair indicated a 73% probability of the UK voting to remain within the EU. We’ve also had a new poll indicating that the swing is moving towards the ‘remain’ campaign. As previously discussed on this blog, anything that supports the ‘remain’ campaign is positive for the Pound, and I’ve said several times that polls are very likely to affect the value of the Pound. This new information has done just that, as you can clearly see this in the chart below:
This is a great opportunity for those that need to buy Euros, as it’s the best it’s been in a few weeks. The ‘leave’ campaign is starting to gain momentum, and the Pound is likely to continue to be driven by polls regarding the referendum.
If you need to buy Euros and are worried about all the volatility we’re seeing at the moment, one option you can consider is hedging your bets to limit your exposure. For example, if you need to buy €100k in the next 3 months, you could fix a rate now for 50% of your requirement, and then wait until after the referendum to secure the remaining amount required. In this way you’re limiting your exposure to the market, and giving yourself some protection against the possibility of a ‘leave’ vote, that would likely send the Pound crashing.
Today at 09:30am we have UK inflation data. If the numbers are better than expected, the Pound could rise further. However if the numbers are disappointing, this spike in the market could well prove short lived.
If you would like to discuss your currency requirements, and find out what rates of exchange I can offer you, then click below to send a free enquiry today.