Foreign Currency Direct Foreign Currency Direct
Open an account

The euro lost ground in trading yesterday, after Italian Prime Minister Giuseppe Conte, of the 5-Star Party resigned in the afternoon. In his speech afterwards he was critical of his coalition partners, in particular Matteo Salvini who he accused of political opportunism and engineering this outcome.

Salvini, who was in a fragile coalition with Conte, under his nationalist League party, could be lining himself up to be the next PM, but the next stages maybe largely determined by Italy’s President Sergio Mattarella. He could either ask Conte to form another government or call snap elections, which may be scheduled in October.

Political uncertainty historically, has the potential to weaken a currency, as investors become fearful over what might lie ahead. With Italy, such political concerns could beamplified, because Italy is the 3rd largest economy in the Eurozone, and with the market fearful over the huge 131% of GDP debt burden, second only to Greece in the Eurozone, there could be increased economic concerns ahead.

This is all against the backdrop of Italy being required to implement a new budget for 2020 that needs to meet EU rules, a task that was difficult, but which might now be even harder to execute. The euro lost ground yesterday against the US dollar and the pound and is trading currently at 1.0941 on GBP/EUR interbank rates, and EUR/USD is at interbank rate 1.1096.

What else will drive the Euro ahead?

What else could drive the Euro?

In economic news this week, we have the latest ECB (European Central Bank) Monetary Policy Minutes tomorrow. Investors are currently trying to asses the likelihood of further economic stimulus ahead for the eurozone, with the next meeting pencilled in for the 12th September. The economic theory suggests any changes in monetary policy could see euro movement, this could potentially be being factored into rates now.

Another key area of focus is the German economy. Germany finds itselfs on the brink of a recession, defined as two quarters of consecutive negative growth. German GDP (Gross Domestic Product) fell 0.1% in Q2 of 2019, and the German central bank, Bundesbank, forecasted recently a continuing decline in the Autumn.

GBP/EUR interbank levels have been volatile since 25th July and today, owing to a mix of continued Brexit uncertainties, against a series of mounting concerns on the euro ahead as detailed above. For clients looking to a GBP/EUR transfer there are many factors currently affecting the currency pairing, you may wish to speak to us regarding your options and the latest currency news.

Read our monthly currency forecast

Download here

News

Euro weakens in spite of improving Eurozone data

Euro weakens in spite of improving Eurozone data

Sterling moves higher against the euro despite Germany's better than expected Q3 GDP statistics.

By Daniel Wright
Best time in 6-months to buy Euros with pounds

Best time in 6-months to buy Euros with pounds

Sterling reaches a 6-month high against the Euro, at 1.1682 on Tuesday as the Conservatives lead in the polls and German GDP figures are released

By Jonathan Watson
Sterling boosted by UK unemployment data

Sterling boosted by UK unemployment data

Pound finds support after UK unemployment figures were released and Tories extend lead in the general election polls.

By Tom Holian
Read more articles

 

L. Beautridge

France

Fantastic service by Jonathan and his team. I feel totally confident in using the service for my foreign currency transfers.

Read our testimonials

E. Springate

France

Phone answered quickly and efficiently. Although not available at the time Jonathan Watson returned my call in France very quickly. Business conducted quickly and in a customer friendly and informative manner at all times. All follow up correspondence and confirmation execute speedily & efficiently.

Read our testimonials

M. Newman

Portugal

A stress free experience with friendly, helpful staff. Quick transfer. I would definitely use them again. Quick and reliable.

Read our testimonials
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.