With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The table below looks at the difference between the rate you would have achieved when purchasing US Dollars at the low and high levels during the past month.

Currency Pair% ChangeDifference on £200,000
GBPEUR1.7%€3,960
Separatists regain Power in Catalan Province

Problems in Catalonia continue to weigh heavily on the single currency

The EUR has found itself under pressure over recent days, as the situation in Catalonia continues to intensify.

This alongside last week’s European Central Bank (ECB) monetary policy statement, has conspired to drive the EUR value down against both Sterling and the USD.

Looking at Catalonia and as touched on in yesterday’s report by my colleague Benjamin Small, the situation is manifesting itself to such an extent that the negative knock on effects for the EUR could be severe.

Yesterday, further negative reports surfaced. One such report indicated that Spain’s chief prosecutor has called for charges including rebellion, to be brought against Catalan leaders.

This follows the Spanish government’s decision to seize control of Spain’s most affluent region, which includes replacing Catalonian civil servants with Spanish officials.

This has heaped further pressure on the single currency, with the EUR losing almost a cent against its Sterling counterpart. Whilst it has found some support against the USD, the overall loses over the past few weeks have been severe and as such those clients holding EUR, may wish to protect themselves against any further losses.

Where next for EUR exchange rates?

The downturn in fortunes for the EUR was not expected and is another example of how unpredictable the currency markets can be.

Last week investors were expecting to see further EUR strength following the ECB’s policy meeting. It was expected that the central bank would decrease its monetary stimulus, which it did. However, it was ECB President Mario Draghi’s dovish comments regarding the chances of an interest rate hike for the Eurozone, which seemed to knock investors’ confidence in the region. Draghi claimed a rate hike may be detrimental to the Eurozone’s continued economic recovery and as such, investors have pulled funds away from the EUR and its value has started to diminish as a result.

This downturn has continued despite some positive Industrial & Consumer Confidence figures yesterday.

Whilst the markets can sometimes overreact to these type of economic releases, I would now be looking to protect any short-term EUR sell positions around the currency rates.

The EUR is still trading at extremely attractive levels against both Sterling and the greenback, especially when you consider the recent history on each pair. Any clients willing to gamble on a recovery will be looking to Thursday’s Eurozone Gross Domestic Product (GDP) and Unemployment figures, in the hope that they might reverse the single currencies short-term fortunes.

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.