Pound euro exchange rate: The pound has been subject to a turbulent week against the euro
Sterling suffered its sharpest slide since the 2017 general election yesterday, and so far this week has fluctuated two percent between the €1.155 high recorded on Tuesday and yesterday’s low of €1.126.
The pound is not faring much better today and is currently trading at €1.129 against the euro, according to data from Bloomberg.
Investors will be left wondering if the worst is yet to come for the currency and if they should be buying their euros now.
Exchange rates are notoriously unpredictable, meaning there is no concrete formula for when to buy and sell.
Ian Strafford-Taylor, CEO of FairFX, advised customers to keep an eye on when the pound becomes strong again, to get the most for their money.
He said the next main movement from the pound could come off the threat of a no confidence vote for Mrs May.
Mrs May has already vowed to fight on with Brexit and insisted she would fight any attempt to force her out after leading Brexiter Jacob Rees-Mogg called for the vote against her.
There must be 48 letters of no confidence to the 1922 Committee to initiate such a vote.
The pound suffered its sharpest slide since the 2017 general election
Brexit is an unprecedented movement in the UK’s history so naturally the pound has fluctuated
Ian Strafford-Taylor said: “Brexit is an unprecedented movement in the UK’s history so naturally the pound has fluctuated as negotiations have progressed over the last two years.
“However, the developments this week – including the cabinet-backed draft Brexit agreement, resignations and letters of no confidence – have sparked intense turbulence for the pound.
“If there is a vote of no confidence and Theresa May is forced to step down the UK will face even more uncertainty, and uncertainty is one of the biggest causes of volatility for currency.
“There’s no doubt political events have a huge impact on the strength of the pound, so people should stay alert to what’s going on and buy currency when the pound is strong.
“It remains to be seen whether the pound will take a further nosedive against the euro, but it is likely to react whenever there are any further political announcements.”
Shaun Richards, an independent economist and advisor to pension and investment funds, said the pound could rally off the news of any Brexit deal.
But he added Sterling could suffer a fall if no deal is clinched between Britain and the EU.
He said: “The turmoil over Brexit has seen the pound fall versus the euro, which makes it look cheap compared to where it has been.
“There is quite a bit of bad news already in the price of the pound as we see people now wondering if the Bank of England might cut interest-rates next rather than raise them as it has promised.
“That sums up the economics but the catch is that the next move will be driven by the politics as any sort of deal is likely to lead to a pound rally, and no deal a fall, at least in the short-term.”
Pound euro exchange rate: The pound has been influenced by events in Brexit
A rally in the pound was also predicted by deVere Group CEO Nigel Green.
He said: “I don’t believe the Tories have the stomach for an election and despite a vote of no confidence in the Prime Minister now reportedly likely, it is probable that Mrs May will survive as leader and Prime Minister.
“Should she remain, she will then heavily push for consensus around the agreement and the EU Brexit summit pencilled in for the 25 November will go ahead.
“Sterling would then rally, as ‘Norway Plus’ gets spoken of, and Mrs May goes into Christmas relatively secure.”
But Nik Storonsky, CEO and Founder of Revolut, warned the pound could fall further.
He said: “For now, the big question is whether or not the pound will fall further on Brexit.
“The likelihood seems strong as we might well see further uncertainty around the Brexit deal.
“It’s also worth noting that pound to euro rates have been much lower throughout the Brexit process, so UK travellers wishing to buy Euros should keep and eye on the price and shop across a period of time for a stronger rate.”
The pound dropped yesterday after a series of resignations from furious ministers who refused to back the Prime Minister and her vision for Brexit.
Dominic Raab resigned as Brexit Secretary over concerns for the “indefinite” backstop agreement to avoid a hard Irish border and Northern Ireland remaining under EU regulations.
Next to announce they were quitting was Esther McVey, who stood down as Work and Pensions Secretary as she could not defend a deal which meant the UK “handing over control to the EU”.
Other minsters to resign throughout the day included Suella Braverman and Shailesh Vara, while Anne-Marie Trevelyan, Ranil Jayawardena and Rehman Chishti left their posts as key figures in Government.