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Cheapest time to buy Euros since February

Although the Pound has strengthened in the past few days due to a Brexit vote beginning to look less likely, I also believe that negative news emanating from the Eurozone has also contributed to the Pound’s gains against the Euro. During yesterday’s trading we saw the Euro fall by almost 1.5% against the Pound, making a €150,000 purchase over £1,600 cheaper in the space of just 24 hours!

One of the contributing factors to this, in my opinion, was news from the Eurogroup meeting yesterday that risks to the Eurozone’s financial health have increased in the past 6 months. The European Central Bank only recently cut interest rates and added to their Quantitative Easing programme in an attempt to boost financial stability, but it would seem that this is yet to have the desired effect. As a result, I think it is highly likely that we could see further monetary stimulus measures introduced by the ECB this year which could have a significant impact on the strength of the Euro.

Looking ahead to next week and we could be set for a volatile one as far as the Euro is concerned. On Tuesday morning, inflation figures for May are set to be released. These should give us a good insight as to whether or not the stimulus measures introduced in March are having the desired effect. If these figures fail to impress then we could see Euro weakness.

Will the ECB Cut Interest Rates?

These will be followed by the ECB’s latest interest rate decision on Thursday which will help give us an idea of how well the Eurozone is performing. I personally think it is unlikely that we will see any change in stimulus next week, but there may be some hints dropped as to what we can expect from the ECB in future interest rate decisions this year. On paper, you would expect the Euro to drop if there are hints towards QE or rate cuts, but the Euro strengthened dramatically when interest rate cuts were announced in March. As such, those with an upcoming Euro requirement should keep in touch with their account manager here to keep abreast of all the latest news and market movement.

If you would like further updates or have any questions about Euro exchange rates I would be happy to discuss them with you - please feel free to email me directly at rjh@currencies.co.uk.

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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.