The Euro finds support following Macron's win in the French elections but problems continue to brew in the Eurozone. 'Super Thursday' could be the next opportunity for those with Euros looking to buy Pounds. The below table provides Pound to Euro exchange rate movements for the past 3 months.
|Currency Pair||% Change||Difference on £200,000|
As largely expected Emmanuel Macron has won the French Presidential election beating Marine Le Pen. This is a vote of confidence not just for the young ex-Rothschild Banker but a vote of confidence in the European systems and ideals which have become so under threat in recent years. I think it is fair to say this was priced in, explaining the largely muted market reaction. Nonetheless I think the knock-on effects longer term will be wide ranging.
I think it is fair to say this was priced in, explaining the largely muted market reaction. The Euro has actually weakened a little as the markets now worry over what comes next politically for the French leader who will need to work very hard to build bridges between right and left. Nonetheless I think the knock-on effects longer term will be wide ranging. Macron could now help to strengthen European resolve to tackle important issues including Brexit, the Euro could well break 1.10 this week against the dollar and has made some small breaks into the 1.17’s against the resilient Pound.
This week key economic data for the Eurozone is limited but I think the Euro will benefit from improved confidence in the region. Mario Draghi is speaking on Wednesday and we have Industrial and Manufacturing data on Friday. Mario Draghi is President of the European Central Bank and investors will be watching his speech for any clues as to future economic plans.
Despite the Macron victory GBP/EUR remains at some of the best rates to buy Euros with Pounds in 2017. Thursday’s ‘Super Thursday’ releases from the Bank of England could easily unsettle this trend or present opportunities if the Bank of England are more upbeat than expected. Both the Pound and Euro are faring quite well at present, both currencies are benefitting from improved economic data and also reducing the political uncertainty clouding over them.
Looking at the current situation I do feel sterling could come unstuck first although the Euro is weaker so far on the Macron victory as market try to digest the news. Brexit does still to me appears to be more negative for the UK than Europe. However back in the headlines last week and soon again is the Greek debt situation with the Greek parliament to vote on reforms before the next Eurogroup meeting on the 22nd May.
The big questions are not just over whether or not Greece will meet obligations to receive the next bailout trances. But also how the conflict between the IMF who seek debt relief and Germany who say Greece should pay in full will pan out.
If you have a GBP/EUR transfer buying or selling this Thursday is a highly significant day for economic news, it is well worth ensuring that you are in contact with your broker here as the market could easily change by a few cents in a very short space of time. If you are yet to trade with us registering your interest is free here.
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