The Euro currency update below discusses the current situation with the Euro and some key factors that could affect EUR exchange rates this week. In the table below you’ll see high to low GBP/EUR movement and the difference when exchanging £200,000 from Pounds to Euros during the last month.

Currency Pair% ChangeDifference on £200,000
German factory Ninth consecutive contraction for Eurozone manufacturingand exports fall beyond forecasts

Eurozone Manufacturing Purchasers Managers Index hits a record high

Eurozone manufacturers ended 2017 on a high by boasting the highest levels of output in nearly two decades.

Not only did this provide the Euro with some immediate strength, but the signs also point to an increase demand and backlog of orders according to the reports, meaning orders should start 2018 on a high and Euro strength continue thereafter. Furthermore, at the end of last year it was announced that the bloc outpaced its peers last year, with overall economic growth at 2.5% for 2017. Even the USA which has managed to hike interest rates three times to 1.5% in 2017 only managed 2.4%.

What effect will the Eurozone’s strong economy will have on the Euro?

Starting this month, the European Central Bank announced that it would half its Quantitative Easing programme to €30bn from €60bn. Whilst economic growth is high within the Eurozone, the inflation level is still below the ECB’s target level. November’s reading was 1.5%, and I would expect December’s reading to carry a lot of importance.

With sustained economic growth it is only a matter of time in my opinion before the Eurozone look at ending their Quantitative Easing program, which is scheduled to end in September, however it is currently being debated whether this will be the case. If these rumours become reality I would expect Euro buyers to be in a much worse position that current levels.

Important data releases

The start of the new year and a new month will always bring important data releases for analysts to chew on. Germany’s employment data will be released and as Germany is considered to be the driving force of the Eurozone this could carry significance. On Thursday, similarly to the UK, services data will be released, whilst Friday welcomes the all important inflation data.

Thank you for reading my Euro report, if you have any questions about Euro exchange rates we would be more than happy to discuss them – you can call our team of currency brokers on 0044 1494 725353.


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