Pound/Euro surges to €1.16, best in almost 2 years
This morning we have seen Sterling/Euro rise to the highest level in nearly 2 years. The reason the Pound has gone up is news that the Brexit process could be delayed, significantly reducing the chances of the UK leaving with ‘No Deal’ next month. There are also rumours that she will rule out the UK leaving without some sort of deal.
The PM is still trying to get some concessions on the Back Stop in order to get her deal voted through on the 12th of March. If she doesn’t achieve this, then a delay is the likely option. All of these events have made the Pound much more attractive to investors, causing it to rise in value. Conversely the Euro has less appeal as major EU economies like Italy and Germany face stagnant growth.
In other news Labour have said they would back a second referendum, if a customs union is ruled out. I think this option would prolong uncertainty and is unlikely to get a majority in parliament.
Will the Pound rise further?
I think it’s unlikely. The markets are now pricing in a slight delay. If the PM succeeds in getting a deal voted through in a few weeks, then yes the Pound is likely to rise further. A delay, while avoiding ‘No Deal’ really just kicks the can a little further down the road, so in this scenario I’d expect the Pound to stay steady rather than rise.
For those buying property overseas, the last few months have saved you a lot of money. Purchasing a €300,000.00 property in Europe is £14,000.00 cheaper today compared to early January. The current levels are around the best we’ve seen since April 2017. Previously when rates have reached these levels, they have dropped away again.
If you need to buy Euros and want the best rates, get in touch today to discuss how we can help. Our rates are significantly better than your bank or existing broker may offer. We can also provide the option to freeze the current rates for up to 12 months by lodging a small deposit; ideal for budgeting for an overseas property purchase.