This report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low for the last month.

Currency Pair% ChangeDifference on £200,000
GBP/EUR3.3%€7,240

ECB Economic Growth Forecasts positive for the Euro

euro coins and notesThe European Central Bank provided some clarity on future monetary policy yesterday. Governing Council member, and Ireland’s central bank governor, Philip Lane told a German business newspaper that once Inflation is on the right track towards hitting their target of 2%, monetary policy would not need to be adjusted at such a dovish pace, hinting that interest rate hikes could well be a possibility in the future. Executive Board member Benoit Coeure also spoke yesterday and said that European economic recovery is the strongest seen in almost 20 years.

The European Commission released their Economic Growth forecasts yesterday which also showed further positive signs for the economy. 2017 forecasts have been increased from 1.7% in May to 2.2%, and predictions are for the economy to grow at the fastest pace in a decade this year. The Euro strengthened against the Pound and US Dollar following these announcements, and provided our clients with a Euro selling requirement with another opportunity to take advantage of.

Brexit negotiations to impact EUR rates

Brexit discussions began once again yesterday and will likely be one of the main drivers for GBP/EUR exchange rates over the next few days and weeks. It is clear that there are some huge hurdles to overcome in just two weeks, as advised by EU Negotiator Michel Barnier yesterday, including the rights of UK expats in the EU, and EU expats in the UK, in addition to agreeing a final settlement figure for leaving the bloc. Any clients looking to buy or sell Euros in the near future may benefit from keeping in close contact with their account manager here during this volatile period, as any news could create large swings on the Euro’s value.

Next week we have key data from Germany on Tuesday; Inflation and GDP (Gross Domestic Product) figures. Germany is the largest economy in the Eurozone and therefore these releases usually have an impact on Euro exchange rates. If the data is positive as expected, and follows yesterday’s positive trade data, we could see further gains for the Euro. GDP for the whole of the Eurozone is also released on Tuesday, therefore any clients looking to purchase Euros may be wise to move ahead of these releases.

Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me with any queries on 01494 725 353 or email me here.