The Euro had lost some ground last week, largely based on perceived weakness in Eurozone banks. The Euro report below looks into the issues with the potential to cause a fall in Euro value this week, we've shown in the below table the range of GBPEUR exchange rates during the past month, showing the difference in return you could have achieved when selling £200,000.00.
|Currency Pair||% Change||Difference on £200,000|
Last week the Turkish crisis saw the Euro devalue as the US Dollar rose. A big package of measures to help Turkey including a 15bn USD injection from Qatar helped stem the losses towards the end of the week proving the resilience of the Euro once again.
This week there is important data in the form of the latest meeting minutes from the ECB. The European Central Bank are in focus for their recent discussions on raising interest rates, with the market expecting a rise in either the ‘summer’ of 2019, or by the end of 2019.
Views are mixed as to which actual month we will see a hike and any fresh news in the minutes could easily trigger Euro volatility on Thursday.
Friday sees the latest German GDP, Gross Domestic Product data which is likely to be a market mover too. Germany is the biggest economy in the Eurozone and markets will be keenly watching to see how the German economy has been performing.
The Euro was rising towards the end of last week and begins this week strong against Pound, close to some of the best rates all year. The Pound to Euro rate looks like it will continue to reflect a weaker Pound and stronger Euro. The Euro keeps proving itself very resilient at shaking off any troubles.
The political issues driving Sterling weakness over Brexit look set to remain and it is quite difficult to see where any GBP strength will come from. It seems that clients holding the Pound hoping for better rates buying Euros will need to rely on a much weaker Euro, which so far has proved quite challenging.
A good example of this is Greece which whilst having debt of 180% of GDP, has today ended its bailout program. After eight years of the programs the country is still in the grips of the crisis but the economy is growing following a series of spending measures and tax cuts.
It seems for clients holding the Pound looking to buy Euros at the best rates, the best strategy is to buy on the spikes. Overall, a more defensive position, buying to protect against any losses does seem the most sensible however.
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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