Should We Expect A Stable Pound To Euro Exchange Rate In 2020?
Last year the pound to euro exchange rate saw a lot of turbulence as political events, such as Brexit negotiations, provided a barometer for the exchange rate. Although, according to financial experts, British sterling ended 2019 on a ‘firm note’, the exchange rate is expected to continue to be volatile and highly influenced by political factors in 2020.
Larger Exchange Rate Activity Expected
Experts predict the latest PMI figures will reveal that fluctuations in the sector will be contracting for another month, making it eight in total.
Financial expert, Micheal Brown, explains that the figures will most likely reveal activity but:
“nonetheless, in the year ahead, political developments will continue to drive sterling volatility, with market participants heavily focused on UK-EU talks over a post-Brexit free trade agreement.”
Impact – From Traders To Holidaymakers
Those looking for short term trade deals or money for a trip abroad naturally should trade their pounds for euros when the exchange rate is high, ensuring they get the most value from their money.
It is hard, however, to determine when the exchange rate will peak and those who trade too early may miss out on a stronger exchange rate, or if they wait too late may miss the exchange peak.
As the exchange rate is expected to stay volatile, traders are advised to make themselves aware of all political events, such as further Brexit negotiations, that will affect the exchange rate.
Some experts even advise to avoid making large exchanges and instead split sums of money, as CEO of WeSwap, Rob Stross, explains:
“the FX market likes stability. If you can’t bring yourself to exchange all your money at once, consider exchanging half your money now and half if the pound strengthens even more or starts to weaken.”
As we delve further into 2020, and further into Brexit negotiations, it is unlikely a stable pound to euro exchange rate will be achieved.
For this reason, traders must continue to consider politics and other external factors whilst planning their trade deals, and holidaymakers looking to trade their holiday allowance should follow the same advice.