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|
EU leaders meet in Brussels today for the EU summit although the issues of immigration and reform of the EU are going to be the main topics this time round.
UK Prime Minister Theresa May will be present however and the ongoing theme of Brexit will inevitably crop up which could see some volatility for GBP EUR exchange rates. Anything that suggests progress is being made could help see the pound rally, although judging by the dinner between Jean Claude Juncker and Theresa May earlier this week it would suggest otherwise. The EU are expected to say that not enough progress has been made.
Only yesterday the president of the European Parliament Antonio Tajani referred to the €20 billion offer for settlement as “peanuts” and suggested the figure should be around €60 billion. He also quoted former Prime Minister Margaret Thatcher when he said “We need our money back”.
ECB President Mario Draghi spoke yesterday although he offered no clues on the expected tapering of the ECB’s asset purchasing scheme which currently runs at €60 billion worth of bond purchase per month. Instead he opted to discuss structural reforms which should set the tone well ahead of the EU summit. The European Central Bank (ECB) meet next Thursday and there is a growing chance that it will start tapering its massive asset purchasing scheme.
There was an expectation that the current €60 billion worth of asset purchases might be cut to €40 billion for another six months and then ended. However there is a growing consensus that the figure could fall as low as €20 billion but continue over a longer period. Every time Mario Draghi comments on the subject there is normally a substantial shift for Euro exchange rates.
All of this speculation is keeping the markets guessing which is why next week’s ECB meeting should definitely be marked in the diary. Those clients with a requirement to buy or sell Euros would be wise to get in touch and take the risk out of it.
Catalonia faces its final deadline this morning to drop the independence declaration that Catalonian leader Carles Puigdemont signed after the referendum form 1st October. Should Madrid move to take control by imposing direct rule this could create unwanted civil unrest but also some problems for the Euro. Political instability is one of the major market movers in this climate. Article 155 of the 1978 constitution which permits direct rule in a crisis has never been invoked so there could be repercussions today on Euro volatility.
Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me with any queries at firstname.lastname@example.org.
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