The Euro gained against Sterling yesterday despite a number of data releases showing negative territory. Retail figures came in lower than anticipated which would imply the ECB's QE programme is not having the desired impact yet. If you would have purchased £200,000 worth of Euros at the high vs the low point of the last 30 days, you would have been €11,694 better off.
The single currency made significant gains against the Pound yesterday morning, despite the fact that a raft of data for the Eurozone had slowed compared to previous month’s figures.
Retail sales figures for March fell further into minus territory yesterday, whilst the services sector also saw a fall for April compared with March.
The fall in retail sales figures would suggest that the ECB’s recent interest rate cuts and boost to their Quantitative Easing programme are still yet to be having the desired effect. The idea behind these recent policy measures was to make it cheaper for consumers to borrow and therefore increase spending which should in turn help boost their worryingly low inflation figures.
This doesn’t seem to have taken effect yet, so we may yet see further stimulus measures introduced by the European Central Bank in the future. The last time the ECB introduced stimulus measures we saw the single currency strengthen dramatically, so anyone with a Euro requirement should keep an eye out for their next meeting in June or any hints towards future policy in the interim. One other topic that is likely to have an impact on the single currency is the breakdown in talks between Europe and the US over their proposed Transatlantic Trade and Investment Partnership (TTIP).
The aim of the deal is to reduce the regulatory barriers to trade for large businesses such as bank regulations and environmental legislation. But France have now put a spanner in the works, stating that they want to stop talks over the agreement as there was a document leaked by Greenpeace that showed how EU standards on public health risked being undermined by the deal. As the action unfolds over this deal it is likely to weigh on the value of the Euro. I also believe that the break down in these talks may act as a warning to any hopes for the UK in agreeing a trade agreement if we decide to leave the EU in June.
This morning there is an economic bulletin released from the European Central Bank following their most recent monetary policy meeting 2 weeks ago. This should offer us a little more insight into how the Eurozone economy is currently performing and may drop hints towards future policy measures, which could in turn affect the strength of the Euro. There’s also growth forecasts released tomorrow and if these mirror the underwhelming economic figures from yesterday we could see some Euro weakness for the end of the week.
Thank you for reading my Euro report today, with such a large amount of economic and political events happening it can be difficult to know when the best time to make an exchange is. If you do have a currency requirement its worth calling us on 01494 725 353 to discuss or you can always email me here.
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