Stronger Euro economic releases put the Euro ahead of Sterling with only weeks to go before the referendum. Draghi kicked off his next policy of purchasing corporate bonds as part of his QE programme.
The Euro has had a fairly strong week vs the Pound with some solid data releases. Eurozone GDP data came out much higher than expected for the first quarter of 2016 and with revised upwards growth from 1.5% to 1.7% this has caused the Euro to hit a 3-week high vs the Sterling. Good news if you’re looking to sell Euros.
German inflation data is due to be published tomorrow morning and as the Eurozone’s leading economy this often will impact upon the ECB’s monetary policy going forward.
European Central Bank president Mario Draghi has cut interest rates previously in November 2013 and has lowered borrowing costs three times since then and this has helped to combat falling inflation levels.
Yesterday Mario Draghi said in a statement that the Euro remains the 2nd most important currency in the international monetary system and with the slower pace regarding a potential US interest rate hike, the slowdown in China and other markets this is causing the Euro to be bought and another reason for the recent strength against both the US Dollar and Sterling. Draghi has also kick started the next policy of purchasing corporate bonds yesterday as part of the latest QE programme and this has been taken well by the single currency. The Euro has subsequently gained against both the Pound and the US Dollar.
On Tuesday the Eurozone releases their own set of Industrial Production data as well as Employment change for the first quarter of this year. Although GBPEUR rates are likely to be dominated by the ongoing Brexit talks and various polls still to be published we could see this data release cause the Euro to weaken marginally against the Pound if the data comes out worse than the expectation.
Are you concerned about the EU referendum and the impact it might have on your currency requirements? Speak to one of our brokers today, we have a number of contact options that may suit your needs. Call our trading floor on 01494 725 353 or email me here for more details.
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