Cummings and Goings – How Politics is Helping the Pound Shape up for a Good Year
14 February 2020

Remember the Brexit vote in 2016? With many ups and downs the Pound is finally heading for a pole position with its highest opening rate against the Euro since the Brexit vote in June 2016. And a tepid showing of the Euro, coupled with talk of the European Central Bank cutting rates within the next few months, are helping the Sterling bounce.

Prime minister Boris Johnson's (along with his spin doctor Dominic Cummings) smash and grab replacement of Chancellor Sajid Javid with Rishi Sunak is seen in some quarters as the impetus that will be required for a period of growth, especially with Johnson's 'hey big spender' commitment to cementing his new power base in the north. Next month the rookie Sunak is expected to present a practical budget announcing more government spending tempered with a nod towards fiscal balance.

Says Privalgo's Ralf Martyrossian: “We are reacting positively to a potential period of growth with the Pound supported by more government spending. The combination of a less rigid fiscal and more solid monetary policies are positive signals."

The big question is what the Bank of England will do with interest rates. The less likely cuts are, the more the Pound will be bolstered. So a longer-term view of the Pound-Euro rate finishing 2020 at around 1.29 is not unlikely.

For advice on moving Sterling to Euros please contact a Privalgo representative.

Cummings and Goings – How Politics is Helping the Pound Shape up for a Good Year
14 February 2020

Remember the Brexit vote in 2016? With many ups and downs the Pound is finally heading for a pole position with its highest opening rate against the Euro since the Brexit vote in June 2016. And a tepid showing of the Euro, coupled with talk of the European Central Bank cutting rates within the next few months, are helping the Sterling bounce.

Prime minister Boris Johnson's (along with his spin doctor Dominic Cummings) smash and grab replacement of Chancellor Sajid Javid with Rishi Sunak is seen in some quarters as the impetus that will be required for a period of growth, especially with Johnson's 'hey big spender' commitment to cementing his new power base in the north. Next month the rookie Sunak is expected to present a practical budget announcing more government spending tempered with a nod towards fiscal balance.

Says Privalgo's Ralf Martyrossian: “We are reacting positively to a potential period of growth with the Pound supported by more government spending. The combination of a less rigid fiscal and more solid monetary policies are positive signals."

The big question is what the Bank of England will do with interest rates. The less likely cuts are, the more the Pound will be bolstered. So a longer-term view of the Pound-Euro rate finishing 2020 at around 1.29 is not unlikely.

For advice on moving Sterling to Euros please contact a Privalgo representative.

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