With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The below table shows the difference in Euros you would have achieved when buying £200,000.00 during the high and low points of the last month.
|Currency Pair||% Change||Difference on £200,000|
The ECB (European Central Bank) released their Accounts from the latest Monetary Policy Meeting on 25-26th October yesterday. The accounts showed that ECB policymakers were mostly in agreement that ample monetary stimulus will be required to help inflation to reach the ECB’s target of just under 2%.
Peter Praet, Chief Economist at the ECB, had made the suggestion regarding a cut in its Quantitative Easing programme from €60 billion per month to €30 billion, whilst extending this plan to at least September 2018. However, it was comments from Mario Draghi which helped to boost the Euro yesterday when commenting on the European economy as being ‘solid and broad-based across countries and sectors’ and suggesting that it was stronger in the second half of this year than had been expected. The key positivity from these accounts was that around 7 million jobs had been created, and unemployment was at the lowest level since 2009.
This, combined with negative views surrounding the UK’s Budget released on Wednesday, has helped the Euro to strengthen against the Pound as we head towards the end of the week.
This morning sees a host of German economic data which will provide an overview of business conditions and economic sentiment within the Powerhouse of Europe. Germany is Europe’s largest economy therefore these releases usually create volatility for Euro exchange rates.
It will be interesting to see if business sentiment remains high considering the announcement earlier this week that Angela Merkel had struggled to form a coalition government. If these figures are worse than expected, I would expect the Euro to weaken and could provide Euro buyers with another opportunity to take advantage of.
That said however, the Social Democratic Party (Germany’s biggest opposition party) could be about to start talks with Merkel about forming a minority government, allowing her the chance of continuing as Germany’s leader. This would remove the uncertainty surrounding the political future for Germany, and this could in turn strengthen the Euro. If you are looking to buy Euros in the near future, taking advantage of the current levels could be a sensible option.
For more information on how future data releases could affect your currency requirement, please feel free to get in touch on 01494 725 353 or email me here.
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