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You are here: Home / British Sterling / GBP/EUR dips below 1.15 for the first time in 6 weeks

GBP/EUR dips below 1.15 for the first time in 6 weeks

March 9, 2017 by Rob Lloyd

GBP/EUR dips below 1.15 for the first time in 6 weeks

Sterling’s negative sentiment continues

weaker pound sterling brexitThe Pound has been on a winning streak as of recent, this week alone Sterling has lost close to two cents against the Euro with rates hitting a 6-week low following the Spring Budget yesterday. There are other contributing factors to the Pound’s decline, the upcoming Brexit negotiations are a huge unknown to markets, and the Government’s position has done little to cool the air across the continent.

Theresa May is expected to invoke Article 50 in the next 3 weeks, then what? The UK looks to be put in an inevitable position where as it must revert to WTO tariffs, at the expense of the British exporter who finds themselves less competitive than their European neighbours, and the British public who will foot the bill with higher prices.

GBP investors are finding little hope in the UK’s transition, especially at a time when the FED are looking to raise interest rates again providing a bigger return on investment. If anything, putting aside the potential political conflicts that may emerge in this year’s elections in Europe, the Eurozone has found safety in the recently upgraded growth forecasts.

Investors are only really interested in the current state of affairs, and even with the prospect of a Le Pen or Wilders victory in the near future, the UK’s withdrawal from the EU will take the drivers seat for the team being.

GBP/EUR to hit 1.14?

At the time of writing Pound to Euro exchange rates have already edged closer to the mid 1.14’s, and the negative trend could extend further throughout March. Tomorrow’s consumer price expectations, Industrial and Manufacturing production may provide some spikes for Sterling but I envisage them to be short lived. I forecast GBP/EUR below 1.11 by the end of March.

Filed Under: British Sterling

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About Rob Lloyd

Robert brings with him a wealth of knowledge on what is impacting exchange rates, especially around the subject of the EU Referendum and the implications for Sterling and Euro exchange rates.

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