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 Euro rates when buying £200,000 at the high and low points:
|Currency Pair||% Change||Difference on £200,000|
Over the course of the last few days the Euro has weakened against the Pound, a majority of these losses have been news from Germany and the fact that talks have ‘collapsed’ to form a coalition Government. This caused initial weakness for the Euro as it brings back the risk of a new election in Germany being called in an effort to form a government. This is something that I personally think is rather unlikely and instead think it is a lot more likely that they will re-start talks and the improvement for GBPEUR will reverse just as quickly. Saying that however, if the concerns mount and result in a new election being announced expect significant Euro weakness – this however would be news expected in weeks rather than days if it does materialise.
On Monday we also saw two updates from Mario Draghi as he appeared twice before the panel of the ECB conference to discuss the ongoing topic of inflation rates not being met. The ECB has not yet met their target for inflation and investors were expecting some form of clarification that action would be announced or some form of clarity about the future policies. This expectation however was not met and the ECB conference did not seem to push for any further clarity on the topic. This disappointed the market and indeed also added to this week’s weakness in the Euro - good news for GBPEUR buyers as rates ended last week at the lowest level for nearly a month. Rates as of this morning are however now nearly 1.5% higher meaning that an additional €3,500 is available now on a £200,000 transfer in comparison to first thing on Monday. Something worth considering as today’s UK Budget is likely to drive market values for the remainder of the week.
Generally the health of the single market has been improving and it is really political rather than economical events which are driving any downward pressure on the Euro. Growth in central Europe recently showed its fastest pace in nine years in Q3 of 2017, with Romania expanding by 8.6%. We also have had an update from a ‘sleeping giant’ of a problem with Greece. The Greek Prime Minister, Alexis Tsipras, announced last week that a €1.4bn benefits package had been approved thanks to the country beating fiscal bailout targets set by its creditors. It very much seems that the historic problems with Greece have now passed or indeed are nowhere near centre stage with little impact on the value of the single currency.
For the remainder of the week we have Consumer Confidence figures, released this afternoon and then manufacturing and trade data tomorrow afternoon. These are all expected to show an improvement and continue the positive trend seen in Europe. As a result it seems likely that the Euro will end the week stronger than where it stands today.
Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me with any queries on 01494 725 353 or email me here.
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