This report will address the factors that could have an effect on GBP/EUR exchange rates over the coming weeks. The table below looks at the difference between the high and low rates over the past month when buying £200,000.
|Currency Pair||% Change||Difference on £200,000|
The Euro strengthened during yesterday’s trading session, after the UK’s Terror threat was raised to Critical, leading to Investors moving their funds into the safer status of the Euro. These gains were also bolstered by Consumer confidence figures for Germany, the largest economy in the Eurozone, being released higher than the previous and expected figures, and the highest reading since October 2011.
However some of the gains made yesterday morning were reversed after President of the European Central Bank, Mario Draghi, gave a speech and delivered the Financial Stability report in Madrid. Mr Draghi disappointed investors by reiterating the fact that he would not be deviating from the ECB’s current monetary policy stance, even though economists were expecting him to hint towards a timeline of plans to taper the current Quantitative Easing (QE) measures. QE is a method used by central banks, where ultimately they create more money in order to get the economy moving steadily again. Draghi was also very keen to stop any rumours about the ECB raising interest rates before the current QE program has ended, which isn’t likely to be before the end of 2017.
The Euro bounced back after yesterday’s blip following subdued comments from the US Federal Reserve yesterday evening that interest rates over in the US would likely be kept on hold, urging Investors to move their money over to the safer choice of the Euro. GBP/EUR rates are currently at 1.155, and this morning’s UK GDP data could push this further down into the 1.14’s.
As the UK General Election is also only 2 weeks away now, we could see further gains for the Euro in the run up to 8th June, as political events such as this usually cause high volatility. If you are looking to buy Euros with Pounds in the near future, securing your currency at today’s rate through the use of a forward contract would allow you to take advantage of these levels for just a small deposit.
Thank you for reading today's Euro market report, I would be glad to reply personally if you would like further information about the factors that could effect the Euro exchange rates. Please feel free to get in touch here.
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