This Euro report will address the factors that could have an effect on exchange rates over the coming weeks. The table below looks at the difference between the rate you would have achieved when purchasing £200,000.00 during the high and low points of the past 20 days.

Currency Pair% ChangeDifference on £200,000
GBPEUR1.4%€3,200
Investor confidence hits 10 year high yet euro gains limited

Investor confidence hits 10 year high yet Euro gains limited

Euro buyers would have marked the German elections and the ongoing Catalan calls for independence as clear moments to look at trading, hoping that both might shake investor confidence in the single currency long-term. Both had the potential but as yet the effects have been very muted.

France and Germany also released a string of positive economic data which further justifies the faith in the Euro from the markets since the start of the year. Furthermore, the first round of economic testing (Sentix) since the German election also came out surprisingly higher than expected, hitting a 10 year high of 29.7 points.

Sentix has effectively squashed hopes that political uncertainty in Germany might begin to drag the Euro back through the 1.15 mark any time soon.

That said, it is worth noting that these impressive releases did very little to spur the euro on further, which suggest much of the bloc’s economic strength has been factored in to Euro exchange rates. As a result, if I was looking to sell euros to buy sterling I would probably consider making a move on the next spike whilst the going is good.

There is are a number of potential market movers due out for the Eurozone this week with inflation and consumer data due out of Spain, Portugal and Italy across today and tomorrow’s trading, all of which will no doubt effect European Central Bank president Draghi’s speech on Thursday. Given the positivity from yesterday’s releases it is likely Draghi will hint to a change in monetary policy which will make the Euro a more attractive prospect on the international stage.

How will the markets react to Catalan’s calls for independence?

In the same way the markets have factored in the worst possible outcomes for the UK’s divorce from the EU, I expect the euro to come under a certain amount of pressure as investors begin to digest the potential risks for the single currency surrounding Catalan’s separation from Spain.

Though classed as illegal by the Spanish government, the final results from the referendum at the start of the month showed an overwhelming vote in favour of independence (90% of the 43% that voted). That said last weekend hundreds of thousands of Spanish unionists filled the streets of Barcelona with Spanish and European Union Flags in an impressive display of patriotism.

With the Catalonian population so evidently divided in opinion I expect today’s meeting between Catalan leader Charles Puigdemont and the parliament to carry particular weight for euro exchange rates this week. Should his symbolic statement be rebutted by the Spanish government once more, tensions may rise further and Euros could be worth considerably less by the end of the week.

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 on 01494 725 353 or email me here.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.