Potential for further lows ahead
8 March, 2018
Over the last 5 months, the Pound has been moving in a sideways trend particularly against the Euro. Moving up and down within a two cent range in that time, which has made things difficult for those who have a requirement to buy Euro. Those who chose to exchange their funds and caught the rate at its peak have benefited while those who chose to wait in the hope the rates could improve further may now be facing a different story.
In recent days the Pound has begun to drop off once again, following the same pattern we saw during the first round of Brexit negotiations last summer where the GBP-EUR rates gradually fell from 1.14 to 1.07. Since this round of talks have begun the Pound has already lost close to 2 cents in the space of a month, and many market analyst are predicting that the drop is set to continue as trade talks progress.
Yesterday Brexit continued to take command in the news. The European council president Donald Tusk spoke about the EU’s draft guidelines on their side on the trade talks which essentially said that the EU have no intention of “cherry picking” when it came to the UK’s participation in the Single market. There appeared to be some contradictions to Theresa May speech on last Friday. Chancellor Philip Hammond also spoke yesterday afternoon about the future partnership between the UK and the EU and claiming the importance of the including the financial services into the free trade agreement. No doubt this topic will cause more back and forth during talks.
If you are looking to secure some Euros over the next few months, you may want to give us a call today to discuss the various options we can provide to help you maximise your funds in what is likely going to be a very uncertain time ahead for the rates. Our forward contracts allow you to lock in at today’s rates with just a 10% deposit, and provides you with the security that your currency is secured and no longer at risk to the market.
Latest Eco Stats
The US posted its ADP Employment change figures which showed a positive change down to 235k from 244k the previous month. Canada Interest rate decision remained unchanged, staying at 1.25% as markets had predicted.
Today is the day the Euro Zone are due to release their latest deposit and interest rate decision at 12:45. Both are expected to remain unchanged with deposit rate decision expected at -0.4% and interest rate to remain at 0%. Any changes here or comments made at the press conference due to be held at 13:30 are likely to cause a shift in the rates so one to keep an eye on today. Also at 13:30 the US post their jobless data and the Bank of Canada Governor Poloz is also set to speak at 16:00. Could be one to watch for those with an up coming CAD purchase. Again it’s another quiet date for UK data, but this will change tomorrow morning as we have a range of UK figures due.
As ever stay in touch with us here at Currency Index, our friendly brokers are happy to talk you through the process of sending funds abroad, and help you answer that niggling question of “when shall I exchange my funds?”.