The euro is struggling to answer some of the questions posed to it in recent years. Namely, will the political direction of the Eurozone drift further off its more centrist and progressive roots? The outcome from the European elections suggests that yes, this is proving to be the case although the slide is not quite as bad as was predicted.

Currency Pair% Change (Month)Difference on £200,000

The economic outlook is also shaky within the Eurozone, with rising global uncertainties owing to the trade wars that are presenting unwanted barriers to the single bloc’s haphazard economic progress. Consequently, the euro has been weaker this week and there might be more pitfalls ahead.

Italy has been in the spotlight this week following Matteo Salvini’s strong run in the European elections, capturing 34% of the Italian vote. His anti-EU and immigration agenda has captured much support. Utilising his Facebook live posts, Salvini is openly threatening to reject Brussel’s requests over Italian debt. There is the potential for euro weakness if this escalates further, as the EU seek to rein in Italian spending.

Sterling did recover against the euro towards the end of the week following these data sets but the bad news in Europe is also bad news for the UK, since the UK relies so much on trade with the EU.

Best time to sell euros in over 4 months

We have this week been very close to the 1.1306 lows on the interbank rate seen on the 24th May, which was the best rate since 17th January 2019. In terms of the outlook on this pairing, it does seem reasonable to expect the pound is going to struggle to make any large gains against the euro, even if the euro has been weaker. This is because the market appears to feel that the political issues in the UK will for now outweigh those in the Eurozone.

However, the path ahead for the euro is also looking fraught with concerns and it has lost value against most currencies, except for sterling. As mentioned above, political concerns seem to me to be likely to become a more and more important theme.

Greece has also hit the headlines with Alexis Tsipras, the Greek PM calling a snap general election following his poor showing in the European elections.

It seems that these European elections might have opened the door with further volatility for the euro ahead. Therefore, clients hoping to buy or sell euros with pounds seeking a quick return to the highs or lows of 2019 so far, might wish to think carefully about what lies ahead.

If you are planning a transfer soon, or in the future, speak to our team about the latest outlook and how we can develop a relevant strategy to help minimise the risk and exposure to the currency markets.


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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.