Is the GBP/EUR exchange rate likely to strengthen?
I have finally sold my house in the UK and plan to transfer the proceeds to my bank account in France. Is the GBP/EUR exchange rate likely to strengthen in the next few months?
Congratulations on the successful sale of your property. We will start with a run-down of what has been happening to the rate so far this year... which is to say not much. The GBP/EUR exchange rate has been pretty static for the last few months, holding around the €1.13 to €1.14 level.
There have not been any surprising changes in the Brexit outlook to get the pound moving, and both the Bank of England (BoE) and European Central Bank (ECB) have remained cautious.
But GBP/EUR may strengthen in the next few months if there is a major breakthrough in Brexit negotiations – particularly in reference to a good UK-EU trade deal. However, analysts reckon the current deadlock could last for a while yet and there are still a couple of years until the planned Brexit transition period ends, so the pace of negotiations may remain slow.
The pound would have another reason to strengthen if Britain’s economy shows enough signs of resilience for the BoE to finally make a move on interest rates. Markets currently bet there will be a rate hike in August and some analysts think there could be another in November. One rate hike in 2018 would certainly boost the pound, hints at two could send Sterling soaring.
If you are not in a hurry to move your money from the UK you may want to talk through your options with one of our currency experts. As well as keeping you up-to-date with all the latest market movements, they will be able to talk to you about services like limit orders – where you can arrange for a currency transfer to occur automatically if the market moves to a certain level.
Question answered by Shaun Dash of Currencies Direct. For more information on international money transfers with Currencies Direct see www.currenciesdirect.com/france or call +33 (0)4 22 32 62 40
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