The EUR has seen somewhat of a turnaround in fortunes of late, following recent markets concerns of an export-led slowdown. The Euro report below looks into the reasoning behind this Euro strength and covers the economic and political factors with the potential to impact exchnage rates in the short term. The table shows the range of exchnage rates for the past month, and te potential difference you could make in return when selling £200,000.00 during the high and low points.

Currency Pair% ChangeDifference on £200,000
Global tensions handicapping euro prospects

The Euro has made further gains against its Sterling counterpart, moving back under 1.11 at yesterday’s high. Despite a small dip against the USD during yesterday’s trading, the EUR has recovered over two cents against the greenback in the past month.

In monetary terms this is an additional $4000 on a 200,000 EUR/USD currency exchange.

Germany is widely regarded as the economic powerhouse of the Eurozone and a jump in spending has boosted Eurozone growth, helping to restore investor confidence in the region, which has benefitted the EUR as a result.

Intensifying global trade wars and President Trumps current trade tariffs on Eurozone exports to the US, of course remain a concern.

Longer-term, the implications of this could have an impact on Eurozone growth but for the time being, the Eurozone economy is showing an admirable resilience to the pending global trade crisis.

Unfortunately, the same cannot be said for the UK’s economy in the face of a prospective no-Brexit deal and this pressure is another reason why the EUR has made gains GBP over recent days, with development in the UK Government causing investors to sell the Pound.

Catalan Independence is back on the agenda, how will this affect the EUR value?

In other news, the Catalan leader Quim Torra will relaunch his regions campaign to split from Spain, rebuffing an offer from the central Government for a referendum for greater autonomy.

He feels this will fall a long way short of their desire for independence and as such, this potentially destabilising issue could resurface over the coming weeks and months. This in itself could be a negative for the EUR but is unlikely to have a direct impact on its value for the time being.

Are the EU prepared to offer the UK an olive branch on the Irish Border standoff?

Another interesting development was a report yesterday evening, which indicated the EU could adjust the Irish border backstop in the hope of winning Britain’s approval in Brexit negotiations.

This could potentially help drive Sterling’s value up and is another reason for those clients holding EUR currency positions to be wary about assuming that the current positive trend will continue indefinitely.

Key economic data

Looking at the Eurozone economic data releases this week and some better than expected inflation data yesterday, helped support a rise in the EUR value. Today we have the latest Service PMI data and Retail Sales figures. With Retail Sales expected to show a sharp drop to -0.2%, it will be interesting to see how the markets react to the prospective downturn.

For more information on how future data releases could affect your currency requirement, call our trading floor 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.