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You are here: Home / British Sterling / Sterling to Euro rate returns to one month high

Sterling to Euro rate returns to one month high

October 30, 2017 by Ben Fletcher

Sterling to Euro rate returns to one month high

The Catalonian crisis in Spain took a further toll on the Euro today. Whilst the Catalonian Regional Government were prevented from going to work the Euro took something of a nose dive against Sterling, especially with the GBP/EUR exchange rate picking up to just below 1.14 at the high. What is apparent is there are still a lot more legs in this story and I’m of the opinion that there will be a high profile finish.

Spain’s Chief Prosecutor has called for charges including rebellion which carries a 30 year jail and a judge will be pulled in to decide should the case go to trial. Catalonia’s ousted leader and Deputy Leader are safe and in hiding in Brussels, which I guess has a certain irony considering it’s the EU’s centre of democracy.

From the perspective of the currency markets it’s a welcome relief for the UK Government who for the first time in over a year are no longer the main headline in the papers. The Brexit talks have for a few moments fallen off the radar as everyone wants to see what happens in Spain. Should there be a major fallout in Spain then that could help to drive the GBP/EUR even higher.

UK Interest Rate Decision on Thursday

The end of this week could bring a spike for Sterling as it’s considered very likely that the Bank of England will raise interest rates. The Central Bank have been somewhat forced into a interest rate hike as inflation has been rising since the Brexit vote in the UK last June. Either way, if there was to be a rate hike I think Sterling could gain over a cent off the back of the decision and if you’re looking to buy above 1.14 then Thursday could be your day. On the other hand if the Bank of England vote to hold the rate, the Pound could see a sharp and significant drop.

Filed Under: British Sterling, Euro Tagged With: Bank of England (BoE), Catalan Independence, Catalonia, Euro weakness, GBPEUR, Pound strength, UK interest rate

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