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

Currency Pair% ChangeDifference on £200,000
Poor Economic Data Drives Euro Down Against Sterling and the US Dollar

EURO strength expected

Yesterday we had the latest economic update from the European Central Bank along with comments by the head of the ECB on their future expectations. It added up to being one of the largest days for the single currency for the month of September as GDP figures rose and expectations for growth in the single currency were increased. We saw GBPEUR rates swing by nearly a cent within a 90 minute period. On a €200,000 purchase a saving could have been seen of over £1,700 if timed wisely. GDP figures rose at a faster pace than expected, further confirming the strength in the Eurozone which has been one of the strongest currencies during 2017. Mario Draghi went on to confirm that the 19 country block grew faster than expected for the first half of the year, and pushed up the bank's growth forecast for the year to 2.2%, the fastest growth in 10 years.

European QE Tapering pending?

There has been a building expectation that the ECB will start to taper their QE program as the economics continue to strengthen. This is still very much the case however the market, after yesterday’s comments, expect this to be towards the end of the year rather than October which was previously expected. This is as a result of inflation remaining lower than previously expected at 1.5% due to global oil prices falling from last year’s highs. Inflation in the Eurozone remains a key indicator as to when this tapering exercise may well start and should remain in focus for anyone with any Euro exposure through the remainder of the year.

Personally, I expect this tapering to happen this year and think the question is when rather than if. As a result I expect the Euro to continue its run of strength, especially against the Pound, through the last quarter of this year and I would not be surprised to see buying Euros becoming increasingly more expensive as we end the year. Rates however do not move in a straight line so timing a transfer wisely remains key to achieving the best levels.

Production figures to drive markets next week

The next key indicator from the Eurozone is next Wednesday when we have the latest Industrial Production figures in the morning. This I expect to continue to show improvements as the Eurozone booms, I don’t expect the strength in the Euro to have started to dampen activity, and as a result I expect the Euro to gain. Buyers of the single currency may well want to move before this release.

Some Euro buyers will be waiting for the German election in the hope of an upset to help them buy the Euro cheaper. The German election however looks less likely to cause an upset on the 24th September. The latest betting odds imply a 92% probability of Mrs Merkel being re-elected as Chancellor of Germany. However, don’t forget how the ‘strong and stable’ campaign fell on its face so recently in the UK.

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.