This Euro report will address the factors that are likely to affect exchange rates in the short term if you are buying abroad or making a currency transfer. The table below shows the difference in Euros you would have achieved when buying £200,000 at the high and low points over the last month.

Currency Pair% ChangeDifference on £200,000
GBP/EUR2.1%€4,900
Mario Draghi Speech Today

EUR sellers buoyed by Draghi’s recent comments but potential pitfalls still linger under the surface

Those clients holding EUR are likely to feel very satisfied, following the single currencies recent gains against both Sterling & the USD.

Despite the Pound finding a foothold over recent days, the EUR still sits close to a three year high against Sterling, providing some excellent selling opportunities.

The EUR did spike below 1.13 before a slight retraction and clients may well be keen to see how much more value it could gain over the coming days.

One of the reasons for the EUR’s improvement EUR were comments made by European Central Bank (ECB) president Mario Draghi, who indicated that the current monetary policy (QE) programme was having a positive effect on the Eurozone economy. This in turn means that we could see the current Quantitative Easing (QE) wound up, when the extended deadline is reached at the end of this year.

QE is put in place to help support an economy by injecting additional funding into it and is generally viewed as negative by investors. This is due to the fact the economy in question could be struggling and requires external assistance. However, when the aforementioned money ultimately has a positive effect, then it can show a recovering economy and this in turn is reflected in investors risk appetite, which is likely to increase.

Whilst the current global market remains uncertain and the EUR itself is susceptible to many external factors, not the least the outcome of Brexit, we are currently seeing the EUR ride the crest of a wave.

Personally, this is why I would be very keen to take advantage of the recent improvements against both Sterling and the USD, rather than gamble on a continued upward curve when so many questions remain unanswered.

We need to remind ourselves that the negatives of Brexit are certainly not one-way traffic. Whilst the UK is currently struggling due to the uncertainty of how the negotiations will progress, the EU will also have to ask themselves similar questions.

This in turn could put pressure on the EUR further down the line, so why take the gamble when the current sell prices look so attractive.

Similarly, with Trump’s healthcare & tax reforms gaining some momentum and support in the US, alongside another prospective interest rate hike by the Fed, the USD could start regain some of its recent losses against the EUR.

Therefore, I would remove any uncertainty whilst reminding ourselves the current levels are in part due to the uncertainty surrounding the UK economy, not just an overriding market confidence in the Eurozone.

Eurozone economic data for the week ahead

Looking ahead and it’s also a busy week for Eurozone economic data releases. Today the latest Manufacturing PMI figures are released, with a figure of 57.3 expected and likely priced into the Euros current value.

We also have the latest Unemployment rate, which is expected to drop from last month to 9.2%.

Tomorrow we have the latest inflation figures, Services PMI data and Retail Sales figures, which are also expected to show an improvement on last months to 0.2%.

Finally, on Thursday we have the latest ECB Monetary Policy Meeting Accounts. Thursday could again prove key for any clients with a EUR currency exchange to make. These accounts give investors an insight into financial market, economic and monetary developments inside the Eurozone.

Thank you for reading my Euro 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 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.