How the Great British Pound is faring against Euro and US Dollar

It’s business as usual for us when it comes to measuring the Great British Pound (GBP) against other economies. Naturally, the mortgage market is affected – either positively or negatively – as outside influences alter, so we continually keep our finger on the pulse of what’s going on.

Last month’s General Election and the unfamiliar territory we find ourselves in due to Brexit makes predictions and forecasting very difficult.

Nonetheless, we thought we’d give you some insight as to where the Pound stands currently against the Dollar (USD) and the Euro (EUR) and where we think it could go throughout the year.

GBP v EUR

At the time of writing, the Bank of England bets have seen the Pound to Euro exchange rate struggle. Whilst not favourable, considerable losses were evaded in the middle of January, in part down to weakness in the Euro. The current GBP/EUR rate is 1.1700.

Looking forward, Sajid Javid, UK Finance Minister, admitted businesses would be affected by Brexit, as he confirmed Britain would not stay aligned with the European Union. And that the country would leave the single market and customs union.

If businesses are hit, the economy will undoubtedly suffer. So, whilst it is impossible to predict any outcomes at this stage, the GBP looks set to decrease in value. Only time will tell if this is right, and if so, by how much.  

GBP v USD

At the time of writing, GBP/USD stands at 1.3000, holding comparatively steady considering a stronger dollar and the increasing likelihood of a rate cut in the UK. A recovery, whilst possible, is not expected.

It is even conceivable that this could fall rapidly to 1.2900.

There has been good news on the housing sector front, though. The Rightmove House Price Index picked up with a gain of 2.3% in January, after publishing five declines in the past six months.

Worth noting…

It’s important to note that, as with all things Brexit, nothing is certain. There are various factors that could influence the economy, including the publication of Britain’s most recent key job market results and ZEW’s German and Eurozone economic sentiment report.

More so, the European Central Bank (ECB) policy decision on 23 January and key PMI projections on Friday 24th.

If the imminent UK PMI data betters forecasts, the Bank of England (BoE) interest rate cut bets could become softer, meaning a healthier Pound against the Euro.

January 2020