This report will examine the factors that could affect Euro 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 over the past 7 days.
The Euro has been on a rampant run against the majority of its currency counterparts so far this month. By capitalising on political unrest in the UK and in the States whilst consistently surprising the markets with positive economic data, the Euro has gained almost 2.5% and 4.5% against the Pound and the dollar respectively.
As far as I can see, there is very little resistance ahead and can certainly envisage the Euro to make further inroads this week and maybe even hit the 1.10 mark against the Pound for the first time since October 2016.
There is a consistent stream of economic data throughout the week that is likely to generate volatility for euro exchange rates. This morning showed a slow down in manufacturing data from Europe’s Power houses France and Germany which has provided a brief spike for euro buyers to capitalise on.
The rest of the week however looks far less promising. As the UK waits nervously for it’s inflationary report, the eurozone is expecting to strike heavily once more with industrial output, consumer confidence and inflation levels to come out positive across the board.
As a result, I can only see the euro gaining further ground as the week goes on. Those looking to buy Sterling with Euros may want to get in touch with your account manager sooner rather than later to make sure you are in position to maximise these gains as and when they present themselves.
This all being said, the single currency’s grip over Sterling may not stay steady for long. Despite all the strong economic data being released, the eurozone’s political frailties remain and could begin to weigh on the Euro.
Yesterday, national Spanish paper El Pais published a study revealing more than ¾ of Spanish business leaders are fearful of Catalonia’s push for independence, with a local referendum set for the 8th of October.
Making up around 20% of Spain’s GDP, A Catalonian exit would have drastic repercussions for the Spanish economy and the Eurozone as a whole. Should their claim gain momentum, I certainly wouldn’t be surprised to see volatility for Euro exchange rates as investors begin to question its stability.
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