The GBP bounced back against the EUR last week, recuperating from much of the weakness experienced towards the end of last year and reached some of the better levels seen in the last 6 months, when the market briefly eclipsed 1.14.
|Currency Pair||% Change in 1 month||Difference on £200,000|
In the last month alone, the pairing has seen movement of almost 4 cents, with transfers at some of the better levels achieving in excess of €8000 more, from £200,000.
Mid-market levels for the GBP/EUR paring seem to have found stability above 1.13, so investors will now be assessing whether this run of form will be sustained and if the market will achieve similar levels to that seen in Q2 of last year.
As sentiment in Sterling appears to be growing and with political and economic tensions resonating from key Eurozone economies, there are arguments to suggest that short-medium term GBP/EUR movement could see Sterling gain further ground.
On Friday, Morgan Stanley’s head of Global FX strategy Hans Redeker, stated that the pound is “cheap” by historical standards and anticipates that the currency’s strength is likely to improve in the future as the probability of a hard Brexit is declining, which suggests that there could be fewer opportunities for Euro sellers to secure favourable positions relative to the GBP/EUR parings recent market climate.
Investors with interests in Euro markets will be closely watching the outcome of economic data releases this week, in addition to the European Central Banks latest interest rate decision.
Tomorrow, the ZEW German economic research institution will publish the latest results from their sentiment surveys for Germany and the Eurozone, which will provide qualitative data from approximately 300 economists and analysts. The results are typically used as an indicator of the economic outlook for the next 6-months.
On Thursday, the latest manufacturing and services purchasing managers index (PMI) data will be released for the Eurozone, which is expected to show a slight expansion and could influence EUR movement as a result.
This being said, the main focus will be on the latest interest rate decision from the European Central Bank (ECB) in the afternoon.
Despite the fact, that there is not expected to be any change to the current level, which has been held at 0% since 2016, attention will be on the following statement from the ECB President Mario Draghi, as investors will be interested in his assessment of the Eurozone economy, following the slump in growth recorded in the second half of 2018.
It could be a volatile week for EUR markets, so clients with an upcoming transfer can discuss strategy with their account manager here, in order to manager their exposure.
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