This Euro report discusses the current situation with the Euro and examines factors that could affect Euro exchange rates in the coming days. In the table below you’ll find high to low GBP/EUR movement when exchanging £200,000 to Euros in the last month:
|Currency Pair||% Change||Difference on £200,000|
The recent Euro strength has cooled somewhat over recent days, as both the Pound and US Dollar have gained a foothold against the single currency.
Despite the Eurozone economy posting some impressive data throughout November, with jobs growth and new manufacturing orders reaching 17-year highs, the Euro has not been able to make any significant impact against Sterling for some weeks.
Talk of an imminent Brexit deal seems to have driven Sterling’s value up, which in turn has had a detrimental effect on the Euro. The Euro has seen its value decline against the Pound even prior to a potential Brexit breakthrough.
It was not long ago that the Euro towered impressively over both Sterling and the greenback, sitting at 6 and 10 year highs respectively. Despite the recent dip, it is still trading at very attractive levels against both, in particular GBP.
The Eurozone economy has exceeded even the most optimistic of analysts this year, as it rode the crest of a wave created by better than expected economic data and a deep-rooted negative market perception around Brexit and the potential devastating effects it could have on the UK economy.
This helped propel the Euro to the highs I mentioned and despite its economy providing a firm base, I doubt it would have reached those levels without the downturn in the UK economy and a complete lack of investor confidence in Sterling.
Having said this, I feel that a sustained run on the Euro by the Pound is still unlikely based on the current market conditions. However, I also feel the Euro will struggle to revisit those heights unless there is huge breakdown in Brexit talks and as such, are you prepared to risk further losses if you have a EUR position to sell?
Personally, I would not be prepared to gamble on the current sell prices with Brexit talks seemingly progressing.
If you do have a EUR positon to sell and are looking for a potential trigger this week, then look no further than tomorrow’s Gross Domestic Product (GDP) figures.
With the Eurozone’s recent economic output exceeding expectation, I wouldn’t be surprised to see a strong reading from one of the month’s most important data releases.
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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