Having said that, we have actually seen a slight recovery today. Rates continued to fall last night, and by late morning today, the pair had dropped as low as €1.3150. However, at 12pm today the Bank of England announced it's decision to hold interest rates, but one of the members, Ian McCafferty, continued to vote for a rise in rates as he has been doing now for several months. I think the markets expected all 9 members to vote to keep the rate at 0.5%, and as one member still thinks the economy can handle a hike, Sterling recovered throughout this afternoon and this 24 chart shows the slight recovery by 1 cent today:
What next for Pound/Euro rates?
Personally I think the spike today will be short-lived and the downward trend will continue. This week alone we've had poor production figures from the UK, a forecast showing that growth will continue to slow, and of course the Chancellor George Osborne saying that there is a cocktail of new threats to the UK economy. Factor in the uncertainty the EU referendum will have, and there's not much to suggest that rates are going back up any time soon.
China continues to slow, commodity prices and the price of oil are at their lowest in over 10 years, and predicted to keep dropping. All of this will weigh on the Pound, and investors will likely seek the safety of the Euro and US Dollar. This suggests to me that exchange rates may continue to fall, and the first half of 2016 looks very unpredictable.
Do you need to exchange currency in the next 6 months?
Buying or selling a property abroad? A business that buys and sells goods overseas? You may be alarmed at how quickly exchange rates have changed.
You need to know your options to be able to make an informed decision on when to fix an exchange rate. Just hoping the market will move your way is not a good strategy, and many clients looking to buy overseas have had to abandon their plans following the decline in the rate, as their budget was so dependant on being able to buy Euros at €1.40 which is no longer achievable.
Your first step should be to send me a free enquiry by clicking here. I can discuss your requirements, explain the options you have to protect against the rate getting any worse, and provide you a quote to compare with your bank or existing currency broker. I have never had an issue providing the most competitive rate, and by simply sending a free enquiry you could save thousands.
Click here to send a free enquiry today, and get a quote