Both yesterday and today have been relatively quiet data wise with many European countries celebrating All Saints Day so if you’re reading this in Europe I hope you’re enjoying your day off. Tomorrow we could start to see GBP/EUR rates moving quickly as German unemployment data is released in the morning. As the Eurozone leading economy German is often seen as a barometer of health for the Eurozone and since the start of the year unemployment has been falling in Germany.
The estimate is for 6.1% for October and this will be closely followed Manufacturing PMI data shortly afterwards. This has also been improving for the last year and anything above 50 represents growth in the sector. The expectation for tomorrow is 55.1.
If both economic data sets are positive then I would expect the Euro to get even stronger vs Sterling. On Thursday Eurozone unemployment data is also announced with the expectation for 10%. Although there are clearly concerns with the current QE programme and the ongoing issue with Italian banks the economic data on the continent has been relatively strong.
We end the week with Eurozone Services PMI data for October and as with Manufacturing data this could provide further support for the Euro vs Sterling.
The Euro is currently close to a 4 month low against the US Dollar and close to its best level to buy Sterling since 2011 creating some excellent opportunities to sell Euros to buy Sterling.
For anyone making a transfer to Europe and worried about where markets may move prior to the end of this year then it may be worth looking at buying a forward contract which allows you to fix an exchange rate for the future for a small deposit.
For more information on how this weeks economic data for the Eurozone could impact your currency requirements, speak to one of our brokers on 01494 725 353.
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