top cx logo
cx logo
Explorearrow down
search icon
Explore
arrow down

EUR/GBP exchange rate fluctuations in 2018?

I plan to sell my French property next year and will need to send the money back to the UK. What is likely to happen with the EUR/GBP exchange rate in 2018?

You will want the EUR/GBP exchange rate to keep strengthening – and there are a couple of reasons why it might.

Economic data from the eurozone has been fairly solid this year, leading to an increase in the number of people pushing for the European Central Bank to start tightening monetary policy. If it does start winding down its expansive quantitative easing programme over the next few months, the euro is likely to surge in response. EUR/GBP could also gain before the end of the year if the US Federal Reserve fails to deliver on its promise to increase interest rates for a third time in 2017. With President Trump’s plans to ‘make America great again’ failing to get off the ground and US inflation not picking up as much as forecast, the Fed may well reconsider raising borrowing costs. Such an action would broadly weaken the US dollar, driving the euro higher in the process.

Of course if the UK’s EU exit negotiations hit stumbling blocks the pound’s poor performance is also likely to continue.

All in all, it appears fairly safe to assume that the EUR/GBP exchange rate will keep strengthening. However, we cannot completely discount the pound bouncing back in 2018. For one thing, if Brexit negotiations progress positively, optimism in the UK’s longterm economic outlook will improve and give the pound a boost. For another, the Bank of England might start increasing interest rates. Slowing UK inflation scuppered the odds of the bank adjusting borrowing costs in the short term but its policy setting committee remains divided on the issue. If the number of policymakers voting for an immediate adjustment rises then so will the pound.

There is quite a lot on the horizon, so you may want to talk through options such as forward contracts with a specialist.

Question answered by Pippa Maile 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 news@connexionfrance.com

Resident or second-home owner in France?
Benefit from our daily digest of headlines and how-to's to help you make the most of life in France
By joining the newsletter, you agree to our Terms & Conditions and Privacy Policy
See more popular articles
The Connexion Help Guides
featured helpguide
Healthcare in France*
Featured Help Guide
- Understand the French healthcare system, how you access it and how you are reimbursed - Useful if you are new to the French healthcare system or want a more in-depth understanding - Reader question and answer section Aimed at non-French nationals living here, the guide gives an overview of what you are (and are not) covered for. There is also information for second-home owners and regular visitors.
Get news, views and information from France
You have 2 free subscriber articles left
Subscribe now to read unlimited articles and exclusive content
Already a subscriber? Log in now