This Euro 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 you would have received in Euros when buying £200,000 at the high compared to the low on Friday of last week.
|Currency Pair||% Change||Difference on £200,000|
Last week saw Mario Draghi, the head of the European Central Bank address the situation on tapering Quantitative Easing, something investors have been keenly anticipating.
GDP figures had come in before Draghi’s speech and there had been a significant increase. There has been growth for the majority of the year despite a small blip in services data last week. Eurozone growth is now forecast to rise by 2.2%.
Quantitative Easing (QE) is pumping money into an economy in order to stimulate growth. Monthly increments are currently set at €60bn.
Draghi indicated there is the possibility of tapering QE as early as October. If this did occur by the same level of previous tapering I would expect the euro to strengthen significantly. I am not of the same views as some of the economists predicting parity, but I think below 1.05 on GBP/EUR is a distinct possibility should tapering occur.
There may however be some reluctance from the ECB following comments from ECB member Philip Lane, who stated there would be an accommodative stance until we see convincing evidence inflation on sustainable path to target. Which did cause a Sterling spike for GBP/EUR, now at a three week high in the high 1.09s.
I think this rally maybe short lived. If data continues to impress from the Eurozone, tapering will be highly likely. I would be trading at current levels.
Trade balance data is released on Friday and it will be interesting to see if exports have been hit due to the weakness of the pound and UK importer’s reluctance to purchase large quantities of stock due to this.
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.
From start to finish with all contacts you feel like a VIP client even if you are exchanging small amount of currency. Always polite cheerful and give you straight talking advice before making the decision. Daniel Johnson and the team are a pleasure to deal with.
Daniel Johnson was very helpful throughout the transaction. It was quick and hassle free. I would definitely use this method again.
Excellent… can’t fault it… Thankyou Daniel.
Daniel Johnson explained clearly and in an easy to understand way what the process would entail before I made the transaction to pay the deposit on an overseas property. The transaction was carried out in an efficient and timely manner and I felt no pressure at any time.