With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The below table shows the difference in Euros you would have achieved when buying £200,000.00 at the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
The Euro weakened slightly against the Pound yesterday following from worse than expected Retail Sales data, which showed a decline for the second month in a row, combined with slightly better than expected UK Services data. However, Markit released their PMI (Purchasing Managers Index) for the Eurozone and demonstrated that business executives are still feeling confident about the economy as we approach the end of the year. It is also worth noting that Germany, the Eurozone’s largest economy, scored the highest reading of 57.7, well above the 55.8 shown in August. This has meant that clients looking to purchase Euros with Pounds are still in a great position; at the time of writing this report a €200,000 purchase is still £8,000 cheaper compared to just 6 weeks ago.
However one factor affecting Euro exchange rates at present is the Catalonian Independence vote which took place last weekend. It has been reported that Catalonia could declare independence from Spain as early as Monday, as pro-independence political parties have urged for a debate and vote on Monday, with a declaration following this although it is unsure exactly when this will be. As Spain is the Eurozone’s fourth largest economy, this could indeed put further pressure on the Euro in the short term.
This afternoon the European Central Bank will release their Monetary Policy Meeting Accounts at 12.30pm, containing an overview of the financial market, and any hints towards the reduction of their current Quantitative Easing programme will be eagerly anticipated by investors. This will be followed by speeches from ECB members Benoit Cœuré and Peter Praet which could provide yet more clarity to the ECB’s actions in the near future. Any concrete signs of when the ECB will be tapering the QE programme which is currently at €60bn per month, and we could see the Euro strengthen considerably, therefore clients looking to buy Euros with Pounds may be wise to do so sooner rather than later.
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.