This Euro report will examine the factors that could affect exchange rates in the coming weeks to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low during the past week.
|Currency Pair||% Change||Difference on £200,000|
Yesterday morning the latest inflation data for the Eurozone was released, with the data coming in as expected with the level remaining at 1.5%. This did however come with a warning for the near future as European Central Bank staff suggested that the first quarter of 2018 could see the headline rate fall to 0.9%. Over the next few months if there is a fall in inflation there will be little hope of interest rate movements in the Eurozone, which could see the Euro start to gradually lose strength.
One of the main concerns that was raised by Mario Draghi at the last interest rate decision for the European Central Bank was the recent Euro strength. From Draghi’s comments there was little appetite when the rate was at 1.08 to drive that even lower with a positive economic policy change.
Tapering the current bond buying program from €60bn a month would be well received by markets as there would be less money being printed, strengthening the currency. Now that the GBP/EUR rate has moved over 4% since the previous ECB announcement there could be even more expectation of short term changes.
In my opinion this would present a strange pattern of events which could see the GBP/EUR fall back towards the 1.10 level before potentially rallying with a Bank of England interest rate hike in November. There is now thought to be a 63% chance amongst economists of an interest rate hike in two months’ time however that prediction could certainly move around over the next few weeks.
Whilst I personally don’t see a return below 1.09 in 2017 anyone looking to sell Euros still has a brilliant window of opportunity. There has been a movement from the best-selling rates but in the scheme of the last year you are still be trading over 15 cents below the high. Get in touch with your broker to make sure you’re trading at the right time, when rates move in your favour.
Thank you for reading my Euro currency 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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