Eurozone economic news could shape today

German GDP (Gross Domestic Product) was confirmed this morning at 2.3% versus 2.2% for the year on year figures. This has helped the Euro to rise slightly against its counterparts but we have more news later this morning on GDP too.

In the table below you’ll find high to low GBPEUR exchange rate movement and the difference when exchanging £200,000 to Euros in the last month:

Currency Pair% ChangeDifference on £200,000
GBPEUR2.42%€5,480 EUR
GDP for the Eurozone

Overall GDP for the Eurozone is confirmed at 10 am and could be yet another market mover. The January figures pointed to the best growth in a decade, as covered in many of our reports recently.

In such a scenario the Euro will perform well, the rate of growth for the Eurozone is outperforming the UK and testing the United states too.

I think the Euro will remain an expensive currency to be betting against, clients buying or selling Euros with pounds today or this week should also take note of Boris Johnson’s speech today which could be a market mover.

With the Eurozone economy performing well and European leaders benefitting from uncertainty elsewhere, the strength of the Euro looks unlikely to be shaken anytime soon.

Politics could be a reason for caution on the Euro

The ongoing saga of the German election held in September last year continues with SPD (Social Democratic Party) leader Martin Schulz resigning yesterday. It appears everyone will carry on and keep this fragile coalition cobbled together since current polls indicate any fresh election would see the SPD (and Merkel’s own party) lose ground to the feared far-right Alternative for Germany (AfD).

We also have the Italian elections ahead and with the result due 2 weeks on Monday, there is not too much time to prepare. Any clients looking to buy or sell Euros in the coming weeks and months should be factoring the Italian election into their plans. With all of the recent potentially Euro destabilising events – French, German and Spanish elections, we have not seen the kind of volatility more familiar with Greece. Despite this, there is plenty of reason for caution on what lies ahead.

On GBPEUR trends I think this just boils down to the fact that for all the concern over politics in the Eurozone it doesn’t quite compare to the potential negative events unfolding around Brexit in the UK. Therefore, clients holding pounds looking to achieve big improvements in their position buying Euros may continue to struggle. The fact we are 4 cents above the lows of 2018 and no longer pointing towards parity should be viewed positively.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me at jmw@currencies.co.uk.

News

Read more articles
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.