Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting GBP/EUR rates and the difference when buying £200,000:
|Currency Pair||% Change||Difference on a £200,000 Transfer|
The European gains and momentum that has been seen in their economy has continued over the last few weeks with the Euro being one of the best performers. Data recently showed that economic sentiment in the Eurozone rose in June to its highest level in almost 10 years. There seems to have been a growing work force across the Euro area which was showed by the number of new work permits that have been issued. For example, Poland has issued nearly 1.3m six-month work permits last year to Ukrainian migrants. The pickup in growth and therefore the confidence in Europe was gained by yet more good news this week.
Recent PMI data was the best seen for six years and suggests that growth was faster that the US and the UK at the beginning of 2017. Yesterday Retail figures were also positive for Europe rising 0.4% in May, twice the increase expected by economists. This pickup in growth has continued to fuel speculations that the European Central Bank (ECB) will soon consider a reduction in the stimulus measures that they first introduced in mid-2014. This speculation will continue to have an impact on the value of the Euro so should be something that anyone with Euro exposure keeps a very keen eye on. Any suggestion that it will be reduced will likely strengthen the Euro making it more valuable and expensive to buy. The sticky topic however is Eurozone inflation, which has remained weak, therefore most expect policy makers to remain cautious.
Today we have the latest meeting from the ECB and this topic of changing policy will certainly be the main talking point. Mario Draghi is normally very positive about the Euro so most expect buying the single currency to get more expensive today. The question really is whether he will give more information on the potential timing of a change which, if given, could really push the value of the Euro up significantly.
If you have Euros to buy in the near or medium term this is certainly something to avoid.
Longer term many clients buying property in Europe have completions scheduled for September. This is when the German election is expected to take centre stage, so is something you should be considering when reviewing your currency strategy. Generally speaking an election weakens the currency in question due to the uncertainty it creates, however, in this scenario there is a very strong argument that this may not be the case. Whoever is triumphant in Germany will be sitting in a very powerful seat at the Brexit negotiations and most expect campaigning candidates to be outspoken against the Brexit in a fight for more support. As a result, if whoever is elected is not a Brexit supporter it could weaken the Pound quite sharply.
When President Macron was elected in France we saw GBPEUR fall by 2 cents as a result of his expected impact on the Brexit negotiations. It seems highly likely we could see a similar impact around the German election so this I believe is an event to avoid if you are a GBPEUR buyer as it is likely to make buying the Euro more expensive.
Thank you for reading my Euro currency report, if you have any questions about an upcoming trasnfer I would more than happy to assist – you can contact me with any queries here.
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