This Euro exchange rate update examines factors that could affect EUR exchange rates in the coming days.
Throughout the last month GBPEUR exchange rates have fluctuated 5 cents between the 1.15s and 1.20s. Week by week we are seeing peaks and troughs. For example throughout Mondays trading session the market spiked into the 1.17s which provided a good opportunity for Euro buyers and 24 hours later the market crashed into the 1.15s which provided an opportunity for those selling Euros.
With the market rising and falling weekly, it’s important to let your account manager know early in the week about any upcoming trades so together you can formulate a strategy to try and achieve you the best exchange rate.
Next week the Eurozone will release their latest Consumer Price Index numbers also known as inflation. Inflation captures the changes in the price of goods and services and is a good indicator when measuring purchasing trends for an economy. Over the last 18 months the European Central Bank (ECB) have been injecting €80bn a month into the economy in a bid to improve worrying inflation levels and therefore to improve consumer spending.
The Quantitative Easing program is set to run for another 6 months however if inflation numbers do not keep improving and actually we see a drop there is a chance the quantitative easing program could be extended. When the Q.E program was announced in March 2015 GBPEUR increased by 4 cents, therefore an extension could seriously hurt euro sellers.
Monday at 3pm, Mario Draghi is set to address the public in regards to the state of the European economy. It’s very difficult to predict Draghi’s tone, however in recent times he has taken a bullish stance and the euro has benefited from his press conferences. Expect volatility Monday afternoon if you are trading GBPEUR. The other data release to look out for is the Unemployment rate released 10am on Friday.
If you are selling Euros in the foreseeable future I would recommend take into consideration that the UK could continue to struggle however if the quantitative easing program was extended I expect the market to spike against you. I would recommend calling the trading floor today on 01494 725353 to discuss your requirements with one of our experience traders. It’s common that clients do not realise they actually have more than one option.
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