Pound struggles continue against Euro

28 July, 2017

Robin Haynes

Yesterday saw the Pound stage something of a limp rally against the Euro in morning trading, followed by a fall back in the afternoon, to end the day pretty much where it started against the single currency. We are now seeing the Euro over 6% more expensive than this year’s high, seen a month before the General Election, and there is no data due out today that is likely to change anything.

The continuing uncertainty around Brexit negotiations and Theresa May’s leadership are weighing heavy on Sterling’s performance, and that is likely to continue for some time, so those of you waiting for an improvement in exchange rates may want to ask the question: what makes you believe the rate will improve? In fact, there are more potential problems ahead, and with the prospect of interest rate rises now off the agenda for the foreseeable future, surely there is more downside risk for the Pound rather than anything on the horizon which might be worth holding out for.

But holds up against US Dollar

Conversely yesterday we saw GBP-USD rates at their best since September for those of you who need to send funds to the US or buy any pegged currencies such as the UAE Dirham. Weak US jobless claims and durable goods orders added to the Greenback’s recent woes, and today at 1.30pm we have preliminary US GDP figures for Q2 released; anything far removed from the expected value of 2.6% could cause Dollar volatility.

US Dollar rates are also impacting the Euro, as the Dollar is now at its weakest against the Euro for two and a half years; the knock on effect for the Pound is that a cheaper dollar currently means a more expensive Euro as we are stuck in the middle of a currency see-saw between the two powerhouses of the currency markets.

Today we also have Eurozone consumer confidence at 10 am, and German inflation at 1 pm, to round off the week before the last day of the month on Monday and then the thinner trading month of August.

If you are worried about exchange rates falling, remember that Currency Index can offer a “worst case” rate for your transaction with a Stop Loss order; and if you are holding out for some magical improvement in rates, that more is often lost by indecision, than a poor one.