GBPEUR rates remain very changeable at the moment, especially with Governments now returning from the festive period. Over the last 2 weeks GBPEUR has changed by over 1.5 cents resulting in a further €1,500 on every £100,000 traded. GBPEUR rates also started the week close to a month high.

Currency Pair% Change in 1 monthDifference on £200,000

Recently euro area inflation showed a fall to 1.6% in December being the lowest rate seen for 8 months. Yesterday European Retail figures were also released and showed an improvement for November, the second month of increases which is seen as good news for the euro. Data showed an increase in activity within Retail of 0.6%, whereby 0.1% was expected. These recent improvements may result in better than expected growth for the block in the final quarter of 2018 however the data is not released for a few more week yet, remembering that Q3 2018 showed a contraction from 0.4% to 0.2%.

Economic data released this week includes Business confidence which is released today and Unemployment data tomorrow. Most expect a contraction to be seen however I don’t expect this to have much of an impact on the GBPEUR pairing as Brexit returns to centre stage.

2019 predictions for the euro

Recent European news has been focussed on the future risks to the block over the coming 12 months with elections taking place. This indeed is something to be aware of long term with the rise of far-right parties. The other topic to be aware of is the Central Bank's policies going forward as Mario Draghi is scheduled to end his term at the bank in October. The focus on the Central Bank is for a number of reasons including the impact of the end of their QE program, the huge amounts of Government debt created over the years and indeed the expectation that the bank is positioning itself to raise interest rates through this year. Personally, I do expect the Eurozone to run into large problems over the coming 12 months however for them to be smaller than domestic troubles in the UK with Brexit, meaning that GBPEUR rates may not be impacted anywhere near as much as the single currency against other currencies when problems do arise.

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