Brexit uncertainty has rippled across the currency market since the UK voted to leave. The upheaval inspired by the process has driven considerable movement in the GBP/EUR exchange rate in particular, going from trading around €1.30 immediately before the referendum to lows of €1.07 at certain flashpoints. Some analysts went so far as to predict parity between the pairing in late 2016.
While GBP/EUR appears to have stabilised a little over the last six months, trading within a range of €1.13 to €1.15, there is likely to be further volatility ahead as negotiations over the UK/EU future relationship finally get underway.
The focal point of these negotiations will undoubtedly be the shape of the UK’s post-Brexit trade deal with the EU.
Theresa May has called for an ‘ambitious’ agreement with close trading links; if that seems to be on the cards, with a positive tone to the talks, it could see sterling make headway towards recouping some of its Brexit-related losses.
That could also prompt a more hawkish outlook from the Bank of England which may give policymakers the confidence to accelerate the path of interest rate rises over the coming year, something that could also lend support to the pound.
Whatever the outcome of talks you can be sure that Brexit is likely to remain a significant catalyst of GBP/EUR exchange rate movement over the next 12 months and beyond.
If you are concerned about it we suggest you stay on top of the latest developments with the support of a leading currency broker. With regular market updates and a range of transfer options, they will help you secure a good rate and make your money go further.
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. If you have a query on this topic send it to email@example.com