Currency Market Outlook GBP EUR Forecast

This morning we have already had some key economic data released with German Gross Domestic Product (GDP) figures announced earlier showing that the Eurozone’s largest economy actually grew in the¬†final quarter of last year by 0.4% which was in line with expectation but has meant we have seen some slight EUR weakness. Later today we have the UK’s latest inflation report which will give an excellent insight into how the Bank of England (BoE) see the current increase¬†in the price of goods and services and as the level of inflation has recently been strong, in line with the BoE target level so it is possible the report today will be Sterling positive and may present some excellent opportunities to buy currency. Sterling Euro exchange rates have remained strong for some time now and despite the fact the BoE have stated that interest rates are unlikely to rise until Spring next year Sterling still appears to be well supported against the EUR and should we continue to see positive economic data for the UK this is likely to continue. Looking forward there are two key factors that could change this; firstly we have the economic impact of the floods on the UK, it is expected that retail sales are likely to suffer the most as a result of the terrible weather the country has faced for the last 2 months but the clean up operation could take time and cost millions. Secondly, the threat of deflation in the Eurozone still looms and should the European Central Bank (ECB) decide to take action or even discuss the possibility of taking action then we could see some significant GBP EUR movement.

So, if you need to buy or sell Euros then today’s inflation report for the UK could be key as will be any comments coming from the ECB with regards to deflation and how they plan to takle this. So, to make sure you are kept informed of all the latest currency news speak with one of our experienced currency brokers who will be more than happy to discuss your currency requirements and the different options available to you. You can call straight through to our trading floor for free on 0800 328 5884 or if calling from abroad call us on 0044 1494 725353 alternatively you can email me directly on trh@currencies.co.uk