Welcome to Pure FX's latest update of the pound to euro interbank exchange rate.
This tells you when it's a favourable time to exchange pounds to euros, for your money transfer!
Sterling flies versus the common currency! The pound to euro interbank exchange rate has hit 1.1590 today, its strongest in 11 months, or since May 21st last year.
The pound has strengthened against the euro, because financial markets are optimistic that the UK and EU can agree a Brexit trade deal, ahead of negotiations this week.
Sterling has jumped, in particular because "there is strong vested interest on both sides to agree on a workable trade deal," says ANZ economist Brian Martin.
Sterling is the "darling of the currency world" at present, according to FX strategist Viraj Pate, as the UK and EU look set to agree a favourable Brexit trade arrangement.
What's more, the pound has also climbed, because the UK and EU agreed a Brexit transition last month, to keep the UK in the Single Market up to 2020. This bodes well for trade talks.
This has lifted the pound, because when the UK and EU agree a Brexit trade deal, this will lift the UK's GDP growth outlook, for once the UK exits the European Union!
Pound rises, as UK interest rates look set to rise
Furthermore, sterling has also jumped against the common currency, because the Bank of England (BoE) is being tipped to lift UK interest rates further, as soon as May.
The pound has risen, because according to Bloomberg's analysis of the financial markets, there's a 93% chance that the BoE will hiked by +0.25%, up to 0.75%, next month.
This has boosted sterling, first because when the UK's central bank lifts interest rates, this tells us that the UK economy is strong enough for higher borrowing costs.
This has also raised the pound, because higher UK interest rates lift returns for investing in UK assets. So sterling rises, as investors buy into the United Kingdom.
What's more, "we think signs of firming wage growth may seal the deal for a May BoE rate hike," says FX strategist Viraj Pate, thereby also strengthening the pound.
As a result, the pound to euro interbank exchange rate has hit this 11-month high, and could continue to climb!
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Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email [email protected]