Today’s Bank of England’s ‘Super Thursday’ has not been kind to the Pound. There was some speculation that they may hint at interest rate hikes later this year, to tighten monetary policy along with other major economies.
However, instead they left rates on hold at 0.25%, reduced the 2018 growth forecast, and Mark Carney was his usual pessimistic self. Also, only 2 of the 8 members voted for a rate hike, 1 less than at the last meeting, signalling a rate hike this year is now unlikely. The net result is clear to see on the chart below. (Correct at 13:10pm, for live graphs click here).
In the last 3 months we’ve now seen the GBP/EUR pair drop from €1.18 to the €1.10’s, and there are several reasons for this:
- Euro gaining strength as EU economy improves
- Sterling weakening due to lower chance of interest rate hike
- The political mess caused by the election
- Brexit Negotiations making little to no progress
The above 4 points are likely to continue in my view, so any clients that need to buy Euros, to purchase property abroad for example, may wish to explore the options we offer. For example, we have Forward contracts that enable to you to freeze the current rate for 2 years & Stop loss orders to protect you against the rate getting works. Our rates are extremely competitive so get in touch today for a free quote. I would be very surprised if we can’t beat the rates you are getting from your existing broker or bank.