This Euro report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low yesterday.
|Currency Pair||% Change||Difference on £200,000|
The Euro saw a sudden fall in yesterday’s trading after the European Central Bank (ECB) stated that the markets had misjudged comments made by ECB President Mario Draghi on Tuesday. This is not the first time this has happened either. It was just a few months ago when the markets previously misinterpreted comments from him which resulted in an irritated response from the ECB.
Mario Draghi had signalled only on Tuesday that the ECB may be coming to an end of the loose policy and asset purchasing it has adopted in recent years. His upbeat tone saw the Euro rocket against all of the major currencies whilst EUR USD reached the highest point this year.
The improvement in the EU after years of weak growth and low inflation is a first step to raising interest rates although with the inflation outlook still fairly low, this is not likely to happen any time soon. The markets were pricing in a move towards tapering the asset purchasing scheme in September only to be reversed after a corrective statement yesterday.
Expect more volatility as the position is clarified further. Any suggestions that there will be some tightening of monetary policy should see the Euro strengthen.
The Euro may have received a welcome boost this week but some of the underlying issues within the EU are still festering. The Italian banking system required two rescues this week for Veneto Banca and Banca Popolare di Vicenza. Although the move is welcome, albeit controversial in that Italian taxpayers will foot the bill, it highlights the extent of the crisis the Italian banks are facing and likely future problems. It was also only three weeks ago when Spanish bank Santander bought failing Banco Popular for €1.
Greece meanwhile may have once again avoided another debt default last week but in another 14 months the country will be back under the spotlight again. With no desire from the EU to offer debt relief, Greece may require another bailout making it bailout number 4, which could see additional weakness for the Euro in the medium term.
Thank you for reading my Euro currency report, if you have any questions about an upcoming transfer exchange rates I would be more than happy to discuss them – you can contact me with any queries here.
James and his colleagues are always courteous and helpful. I have also never been able to find rates of exchange that are more competitive. I am particularly impressed with the service, as I am not in the habit of transferring massive amounts!
As always a really quick and easy transaction. James is very knowledgeable and helpful. Great rates.
Always helpful and they always give rates at the very top of the range. Quick transfers to our french bank account – highly recommended. Well done James Lovick 😉