The Euro strengthened against all of its major currency counterparts yesterday, and rose to a three week high against the US Dollar, after German industrial orders were published better than expectation in May. This was welcomed after four consecutive months of decline, as the demand from domestic consumers gathered pace once more. Today's Euro report looks into the impact of this on the Euro, as well as the easing risk of trade war with the US. The table below shows the difference in exchange rates between Sterling and Euro, showing the difference in return you could have achieved when selling £200,000.00 during the past month.
|Currency Pair||% Change||Difference on £200,000|
Another factor to the Euro strength yesterday was subsiding fears over the looming US vs EU trade wars, as the US seemingly softened its stance on trade tariffs towards EU carmakers. German car manufacturers were told yesterday by the US Ambassador to Germany that the US would lift the proposed tariffs on European car imports so long as the EU followed suit on US car imports, according to a German newspaper report released yesterday.
The US also received some poor economic data in the form of Jobless Claims (the amount of people filing for unemployment benefits rose higher than anticipated), which meant that investors moved their funds into the Euro causing it to strengthen.
Data for the Eurozone is relatively light as we end the week, however today will be key for GBP/EUR exchange rates as Prime Minister Theresa May has called for a cabinet meeting to be held at Chequers, where she is expected to suggest a third Brexit option to her ministers. Little information regarding this third proposed plan has been detailed as yet, however Mrs May met with German Chancellor Angela Merkel yesterday, who described the plan as ‘unworkable’.
With cracks showing in May’s party, if this meeting doesn’t have a positive outcome then we could see further strength for the Euro, and a move towards 1.11 could well be on the cards. Therefore clients who are looking to buy Euros with Sterling may wish to move early to avoid any further potential losses.
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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