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:

Currency Pair% ChangeDifference on £200,000
GBPEUR2.6%€5,800
Angela Merkel: Migration Deal ‘not the end of the road’

EUR weakness despite positive growth data

The Eurozone economy grew at the fastest pace in 10 years last year, at a rate of 2.5%, signalling that the European Central Bank’s huge bond buying programme had been effective in stimulating growth in the economy.

However, figures for the final quarter of 2017 came in just below expectation at 2.6% and the Euro weakened against the Pound as a result of a host of poor data releases following this. German Inflation figures for January were released worse than December’s data, along with Consumer, Services and Industrial confidence surveys all signalling a drop in economic sentiment.

ECB President Mario Draghi has recently taken a cautious approach to monetary policy going forward, suggesting that there is almost no chance of an Interest Rate hike this year, and these latest figures demonstrate his reasons behind this dovish tone.

On Monday, the ECB’s Chief Economist Peter Praet also suggested that the current bond buying programme would only be stopped when inflation was just below the target of just under 2%, without any stimulus help from the central bank.

Catalonian update

Another issue weighing down the value of the Euro is the ongoing situation in Catalonia. It was announced yesterday that the election for a new regional President would be postponed after the highest court of Spain decided that Carles Puigdemont would not eligible to run for presidency while he remains in Belgium as a fugitive. The election has been paused until further notice from the courts, but they will also not nominate an alternative candidate, pushing for Puigdemont’s return to Spain where he faces the prospect of arrest. Clients with a Euro requirement should keep an eye on further developments, as they have the capacity to create volatility for Euro exchange rates.

This morning sees the release of German retail sales figures and Unemployment rate, which is key as Germany is the largest economy in the Eurozone. This is followed by the Unemployment rate and Inflation data for the whole of the Eurozone, and historically these figures are a key mover for Euro exchange rates. If these figures disappoint as expected, we could see GBP/EUR head back towards 1.15, therefore clients wishing to sell Euros to buy Pounds may be wise to do so ahead of these announcements.

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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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.