Just yesterday, GBP/EUR rates were holding firm above €1.17, but the wind has now been taken out of the Pound’s sails. It’s looking quite likely now that Article 50 will be delayed, possibly by up to a year. This morning the PM requested an extension to 30th of June, but it’s expected that the EU might only approve a much longer extension. As a result the Pound has been sliding all day, and at the time of writing GBP/EUR is at €1.16 and GBP/USD is at $1.30.
Will the Pound rise or fall due to Brexit?
The road to Brexit is a long and winding one, and who knows which direction it will take in the coming weeks and months. The EU want to give us a long extension, France don’t want to and could easily veto it, while the UK want one until the end of June. Cross party talks may or not lead to a deal, which may or may not be a softer Brexit. There might or might not be another ‘confirmatory’ referendum, and would could still end up leaving with no deal next week. Or not. So nearly 3 years on from the vote to leave, it’s still very unclear what is actually going to happen, with the UK still bickering about what type of deal it wants. Clear as mud.
Ultimately, it’s still likely a free trade deal will be agreed, however it’s probably going to take a long time. A poll among FX strategists by Reuters indicated that if a Brexit deal looks likely, the Pound could rise by 3%. If negotiations fail, then they predict the Pound could fall by 5%. That puts the GBP/EUR forecast in a range of €1.10 to €1.20, which is on a €300k conversion equates to a difference of around £23,000.00.
Do you need to buy or sell currency in the coming months?
As you can see from the Reuters poll, there could be large swings in the value of the Pound in 2019. Just sitting back and hoping the rate will move in your favour is not recommended. Hope is not a reliable economic tool and it could end up costing you dearly. A better approach is to speak to a currency expert to discuss your requirement, time-frame and attitude to risk. We can then explain your options, so you can consider what steps to take to protect against adverse market movements.
To discuss your currency requirement with an expert, contact us today. Our consultation service is free, and our exchange rates are extremely competitive.