With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The below table shows the difference in Euros you would have achieved when buying £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
The latest set of Eurozone data released yesterday, the consumer price index wasn’t just a disappointment for the Euro (Lloyds bank were expecting core inflation to pick up to 1.0%, the actual figure was 0.9%) but more a concern for the European Central Bank.
As most of our regular readers will know, the European Central Bank adjusted its Quantitative Easing program, for our not so regular readers this is a tool used by a central bank to help stimulate an economy by buying up government bonds forcing up the value of these bonds and therefore the attractiveness for other investors to buy and jump start the economy. This adjustment in QE was made as a result of the Eurozone’s inflation picking up in recent months and a stronger outlook for the economy. With a strengthening economy, a reduction in QE was seen as a positive for the Euro. The concern for the Euro at present is that Mario Draghi, President of the European Central Bank was fairly adamant in his speech that he would be able to extend the Quantitative Easing program or if the economy really starts to backpedal, he would increase the amount of government bonds being bought. Both of these scenarios would be damaging for the value of the Euro.
The main talking point for the Eurozone in the up and coming weeks will be the EU Summit on the 14th and 15th December when the leader of the EU27 will decide on whether the deals put forward from the UK’s negotiators are sufficient to allow progression talks to commence. This would be considered more Sterling positive and so I’d expect the Euro to retreat slightly against the Pound and could therefore present some favourable opportunities for clients buying Sterling. A new month will bring new data, make sure you are up to date with what could affect your purchase by being in contact with your trader.
Thank you for reading my Euro report, if you have any questions about an upcoming transfer 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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