Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting Euro rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
Generally economic data within the Eurozone continues to show improvements. Euro area factories are recording their strongest month since surveys began in 1997 recently and Germany’s unemployment rate fell to a record low of 5.5% in December. This trend of good data continued yesterday with central unemployment data released. This was released at 8.7% in November from 8.8% in October with a big contrast compared to the highs of 9.8% a year earlier. This was the lowest rate in the Euro area since January 2009 and will only go to support the European Central Bank's policy. This release resulted in a slight uplift in the Euro's value against the Pound giving Euro sellers a half cent gain on the news or the equivalent of £400 on every €100,000 exchanged.
It has interestingly been suggested that when the UK leave there will be around a €12 billion shortfall in future budgets that the UK contributes currently. French President Emmanuel Macron warned fellow EU leaders to remain focussed on their “collective interest” to keep the EU intact following the UK’s exit.
The UK may potentially be leading the way with this mind-set with others having started to show interest. Switzerland’s outgoing president called for a referendum to clarify the country’s future relationship with the EU recently. Italy’s President urged the country’s political parties to offer voters “concrete and realistic proposals” ahead of March’s potentially significant General Election which could be fundamental in Italy’s future path in Europe. Something to keep aware of.
Most will be aware that Angela Merkel is in the process of negotiating a coalition government being formed. This is between the Christian Democratic Union (CDU) headed by Angela Merkel, the Free Democratic Party (FDP) and the Greens. This ‘grand coalition’ has been in negotiation for weeks now, which is normal in Germany however opinion polls show a deterioration in public support. The support has fallen from 61% in December down to 45% in January in data released this week.
The expectation is that a government could be formed as soon as Friday this week following party conferences but most now expect a vote within Green party conference on the 21st of January to potentially conclude matters. This is something to be aware of if you are in the market for Euros as political uncertainty will normally weaken the Euro. So expect Euro strength when a government is formed and indeed weakness if there are further delays in the forming of government.
Thank you for reading my Euro currency report, if you have any questions about an upcoming transfer 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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