When should I sell my EUR positions?

The EUR has started to recover some of the ground it had lost against GBP and the USD of late, with yesterday’s positive Trade Balance figures helping to support its rise in value. GBP/EUR rates have moved back under 1.17, whilst EUR/USD sit at a six-month high at 1.1065.

The table below shows GBP/EUR exchange rate movement over the last month:

Currency Pair% ChangeDifference on £200,000
GBP/EUR2.5%€5,880

This move has brought about some much-needed respite to those clients holding the single currency, who had seen its value diminish over recent weeks. Whilst the markets still remain cautious, this improvement could present the perfect opportunity for those clients looking to sell short-term EUR positions.

In my opinion the main reasons for the improvement are based more around the reciprocal currencies downturn, rather than an overriding investor confidence in the EUR. The USD is struggling of late and I have already discussed the Pound’s problems following rising inflation levels and stagnant wage growth. This in turn has inadvertently boosted the single currency and has given clients and investors alike, a window of opportunity to sell any EUR positions.

Looking at the Eurozone region and there are still many negative variables to consider, including political elections in Germany and the on-going debacle with Greece’s seemingly impossible repayment structure. There have been some positive moves, in particular the French election results and seemingly a move away from the far-right movement. However, personally I do not have enough confidence that the single member states can move together in one entity, with further problems likely to occur over the coming weeks and months.

The European Central Bank (ECB) have already had to extend their monetary policy (QE) programme, which is where they inject additional funding to help support their economy and whilst ECB president Mario Draghi remains upbeat as usual, this in itself is a telling sign that all is not well inside the region.

Personally, I would look to protect the gains made ahead of the ongoing Brexit detachment saga and the other potential negative issues I mention above.

Key Eurozone data

Looking ahead and today we have a host of inflation data released, which is expected to show mixed results. This is followed on Thursday by the latest ECB monetary policy meeting accounts and president Mario Draghi’s subsequent speech.

Finally, on Friday we have Consumer Confidence figures, so expect increased volatility for the single currency as we move through the week.

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 at mtv@currencies.co.uk.

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.

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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.