The ECB released meeting minutes yesterday, providing insight into the March 8th meeting. These highlighted concerns over a strong Euro, in the light of the recent trade wars arising from the US/China imports tariffs implemented. This Euro report looks at how this could potentially affect exchange rates if the ECB were to decide on holding off of further QE reductions for the time being. The table below shows the difference in Euros you could have achieved when buying £200,000.00 during the high and low points from the previous month.
|Currency Pair||% Change||Difference on £200,000|
After appearing seemingly unstoppable for so long the Euro gave up ground yesterday across the board as the ECB highlighted caution over Inflation and Euro strength. The European Central Bank (ECB) the recent strength of the Euro was a real cause for concern presenting a ‘significant source’ of uncertainty. In what most commentators thought would be a fairly innocent release the ECB Minutes were released yesterday providing a more detailed account of the policy meeting from 8th March. Whilst this meeting had seen the Euro find its strongest point of 2018 against the pound, these later notes suggested ECB concerns over Inflation and the impact of a strong Euro if Trade Wars escalate.
With concerns over Trade Wars having increased since the March meeting, markets are fearful the ECB will be less keen to end their QE (Quantitative Easing) program. Expected to be ending in September, this QE has been used by the ECB to inject liquidity into the Eurozone financial system and promote growth in response to the financial crisis.
The next ECB meeting is the 26th April but Euro sellers for pounds hoping for an improved opportunity must first tackle next week’s UK data which could see sterling rise if the data is strong. The longer term forecasts would now seem to support a weaker Euro against a resurgent pound but the Eurozone is still in a strong position.
Economic growth is greater than the UK and despite some political concerns, the recent reinstatement of Angela Merkel is keeping overall market confidence high.
Nevertheless Euro sellers might now wish to be taking careful stock of their still exceptional positions, some 15 cents better than before the Referendum. Selling €200,000 today would get £22,000 more than June 2016.
With plenty to discuss on the Euro owing to volatility at present make sure you have highlighted any possible Euro transfers to our expert team.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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