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 in Euros you would have received when buying £200,000 at the high compared to the low for the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBPEUR1.9%€4,200
Brexit transitional talks continue to strengthen the Euro

Single currency weakened by ‘black hole’ in budget from UK exit

So far much of the Brexit fallout has all been centred around how the Pound could be negatively impacted, but yesterday we saw the Euro show signs of weakness as a result of Brexit, with European Commission chief Jean-Claude Juncker claiming that he believes the EU need to prepare for the large hole that the departure of the UK will leave in their budget, to the tune of around €12bn. On paper, you could have been forgiven to think that the Euro should have been more likely to strengthen yesterday, with retail sales and economic sentiment indicators posted solid figures, but I believe that Juncker’s comments may well have reversed what gains we could have seen.

Theresa May announced a reshuffle in her government in an attempt to revamp the Conservative party after a turbulent 2017 and this seems to have been well received with investors and therefore bolstered the Pound.

The Eurozone has posted some impressive economic figures of late, in particular eclipsing the UK’s growth figures for 2017, and this run could be set to continue if the economic bloc’s unemployment rate drops tomorrow which is being widely anticipated.

Will the ECB terminate its QE programme in 2018?

Looking longer-term we may see some considerable Euro strength towards the end of this year if analysts’ predictions are to be believed, with many suggesting that the ECB could completely terminate their bond buying scheme in September. At the end of last year they announced that they would be halving their QE programme from €60bn per month to €30bn, with the thought that they would then gradually wind down QE further in the following months.

However, many analysts are now predicting that they could bring a halt to this altogether and potentially raise rates from their record lows at the end of 2018/beginning of 2019. If that is the case then it could significantly strengthen the single currency, making it a more attractive proposition for investors, so any clients with Euro exposure should keep a close eye on this topic as events unfold.

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.

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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.