Sterling finds support against Euro

 

Pound supported on Brexit hopes

Sterling has risen from €1.11 to €1.12 vs the Euro today. Pound/Dollar has also risen and broken through the $1.30 mark. As I outlined in my last post, there were some rumours this week about the UK and Germany softening their stance on Brexit negotiations, and this optimism has kept the Pound supported this week. I think a deal will eventually be agreed, probably in November. Markets seem more confident of this too, and comments and rumours from influencers are causing the moves in the value of Sterling.

Today’s rise comes as the EU negotiator Michel Barnier, has said that he is ready to simplify Irish border checks, and that they are open to discussing other backstops. The comments were released today, from meetings earlier this week. More positive news then, and the Pound has risen by 1 cent against the Euro to hit €1.12. Click here to view live real time graphs.

If and when they agree a deal, the consensus is that Sterling should rise by 6% which would put GBP/EUR at €1.19 and GBP/USD at $1.38. If however we crash out without a deal, a drop of 8% is likely. This would put Pound/Euro at €1.02 and Pound/Dollar at $1.19.

Either way, a few months from now we could be looking at exchange rate that are very different to the current levels that are available. If you need to exchange currency in the next 3 months and would like to speak to an expert about what might happen, contact us today. We can outline your options and provide you a quote.

Bad news from Europe also helping to support GBP/EUR

Another reason for the halt in the decline of Pound/Euro rates is worse than expected numbers from Europe. This has weakened the single currency, making it cheaper to buy and keeping the rate above €1.11. German Factory orders were not impressive. Today we’ve also had poor EU growth figures and worse than expected German Trade balance numbers. This has stopped the Euro making any further gains so I don’t think we’ll see rates go below €1.11 in the short term.

Jobs data from the US later

At lunchtime we’ll see the latest US Non-Farm payrolls numbers. This release often causes large movements in exchange rates. This is because the number is notoriously difficult to forecast and the result is often a surprise. The markets expects 191,000 new jobs to be created. A higher number would push GBP/USD lower, and vice versa.

Other emerging market currencies are starting to recover also including the Turkish Lira. Safe haven flows to the USD has kept the Dollar strong lately, but this could now be coming to an end if investors no longer feel the need to put funds in safe havens.

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One Comment on “Sterling finds support against Euro

  1. Pingback: Currency forecasts for GBP, EUR, USD, CAD - Currency Forecasts

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