Euro rate at 14 month low

This morning the rate for buying Euros has fallen to its lowest since December 2014, as momentum continues in favour of a weaker Pound and more expensive Euro. The move was assisted by yesterday’s worse than expected GDP estimate, and weaker overnight UK house price figures. Of course, the ongoing progress towards a June in/out referendum on the UK’s EU membership is the underlying worry for investors, with the Pound set to struggle amidst uncertainty for the next 4 months if the proposed June referendum takes place. We will know more after the EU summit later this month, which could pave the way for the June date.

Bloomberg analysts have warned that the Pound could drop as much as 20% against the US dollar and Euro, should the UK vote to leave the EU, potentially leaving the Pound trading near parity (£1=€1) against the Euro and around $1.15 against the US Dollar.

US Dollar cheaper
The US Dollar rate did improve overnight, as Federal Reserve Chairman Janet Yellen used a speech to warn against worsening growth conditions in the US. As a signal that the Federal Reserve would not be raising interest rates again in the short term, the Dollar weakened and returned the rate to near its best this year so far for those of you sending money to the USA.

Quiet day ahead
Today we have very little important data due out, so the trend of recent days could easily continue, with the Pound being sold off across the board and exchange rates potentially falling further.