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 during the past month.

Currency Pair% ChangeDifference on £200,000
GBPEUR3%€6,870

Euro weakness as ECB extends QE programme

The Euro weakened against its major currency counterparts during yesterday’s trading session, after it was announced that the European Central Bank will plan to taper its €60bn per month asset purchasing programme to €30bn per month starting from January. Although this is positive news for the economy and was widely expected by the markets, the surprise was that the bank would extend the programme into September 2018 or beyond, if necessary.

Trade Wars could continue to slow growth in the Eurozone

As expected, it was announced that Interest Rates would be kept on hold at 0% however another reason why the Euro weakened so significantly was due to the announcement that interest rates are expected to remain at the current level until long beyond the end of the QE programme.

Mario Draghi spoke after the release at a press conference, adding further clarity to the banks decision. He added fuel to the fire by stating that if economic conditions worsen or if Inflation doesn’t pick up pace towards the ECB’s target of 2%, the bond buying programme will be expanded once again, and that there would be no sudden end to this stimulus. This news provided our well informed clients with a great opportunity of purchasing Euros with Pounds, as a €200,000 purchase yesterday became £1,900 cheaper if timed correctly, and highlights the importance of being in close contact with your account manager here.

Spanish Senate vote today on Catalonian Independence

Catalonian leader Carles Puigdemont spoke yesterday in Barcelona regarding his government’s ongoing push for independence. He stated that it was for the regional parliament to decide, ruling out a snap election, which disappointed crowds protesting outside the regional government building yesterday who had been hoping that he would declare independence. The Spanish Senate are due to vote on the triggering of article 155 of the Lisbon Treaty today, which allows Madrid to take control of institutions, police and finances. This vote could cause volatility for the Euro and clients with Euro requirements could benefit from keeping in close contact with their account manager here who can keep you up to speed with developments.

Looking at the week ahead, Tuesday will be key for Euro rate movements as GDP (Gross Domestic Product) and Inflation readings will be released. This will also be followed by the European Commission’s release of Economic Growth Forecasts. GDP and Inflation are both key barometers to the health of the economy and any further signs of slowing inflation could lead to further Euro weakness. Any clients looking to sell Euros may be wise to do so ahead of this announcement.

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.