With the EU GDP figures expected on Wednesday Steve Eakins looks at how these could affect Euro exchange rates, with the expectation for positive data. Below you will find movements in just a month affecting the GBP/EUR rate when buying £200,000:

Currency Pair% ChangeDifference on £200,000
GBPEUR3.40%€7,500
EU GDP figures are due

The economy has continue to show signs of strength. Last week Eurozone activity, as measured by PMI indices, accelerated at its fastest pace in more than 10 years. The next data set is EU GDP figures which are due on Wednesday. This could significantly change the value of the Euro and is expected to confirm yet another improvement. GDP figures updates are reported every month with an increasing amount of data for the last complete quarter, until all data has been compiled. So the release tomorrow is the final revision for Q4 of 2017. Previous releases have suggested that 2017 saw the fastest growth for the EU of the last decade so expectations are high. If this is confirmed I expect the Euro to get more expensive to buy, however if missed values could fall giving Euro buyers an opportunity.

EU GDP data is expected to show growth of 2.7% up from the last revision of 2.6%. To put it into contrast the UK is forecasted to have grown by 1.8% last year.

QE tapering within Europe

The long standing question about when the European Central Bank (ECB) may further taper their QE problem will potentially be re-visited this week. There are a number of key members within the ECB holding speeches over the next few days. The QE program is the instrument the central bank used to inject additional funding into the economy after the crash in 2008. Currently it stands at €30 billion a month but following the continual signs of growth many expect the amount of stimulus to be reduced or tapered. As and when this is confirmed many expect the euro to gain in value as less stimulus suggests a stronger economy and therefore currency.

 

For live updates on this topic through the week make sure to contact your broker here by calling our trading floor on 01494 725 353. Alternatively you can email me directly at hse@currencies.co.uk.

News

Read more articles
Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.