During last month’s meeting held by the European Central Bank, Mario Draghi confirmed that the current QE programme would be finishing at the end of this year. The Euro report below looks into the reasons for this impacting the single currency and how this could change GBPEUR rates in the short term. The table below diplays the range of GBPEUR for the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBPEUR2.2%€5,050

This has been taken relatively well since then with the Euro remaining in a fairly tight range against the Pound and moving higher vs the US Dollar over the last few weeks.

The QE programme was designed to assist the economy on the continent for the last few years whilst interest rates remained at record lows and as this will be finishing in the next few months the next step for the ECB could be to raise interest rates at some point.

Eurozone inflation data is due for release tomorrow morning at 10am with the expectation of 2% year on year which is in line with the target. Therefore, any signs of this coming out higher than expected could prompt the ECB to think about raising rates sooner than the markets expects which is currently towards the end of 2019.

If it wasn’t for the potential tabling of a concession deal by the EU in Brexit talks at the end of last week, GBPEUR may likely be looking at testing new lows past the 1.11 mark. Instead, GBPEUR is now sitting in the pivotal mid 1.12s and since Friday’s dramatic repricing of Sterling, I feel it would be unwise to hold out for long term sustainable gains either way.

Could the Euro weaken against the Pound?

 As covered in the Sterling section of this report the Pound is under a lot of pressure against the single currency caused by the ongoing Brexit saga. However, Conservative member Jacob Rees-Mogg has suggested that he may be coming up with a challenge to the latest Customs Bill which will be voted upon this morning.

If the Tories manage to quash any amendments then this is likely to provide Theresa May with some positive news and this could cause the Pound to potentially rise against the single currency. At the press conference held yesterday in Beijing the European Commission President Jean-Claude Juncker has said that China needs to open itself up to more trading.

Juncker has said that he wants the US, China and Russia to do more trade with the European Union and if talks go well could this lead to more trade with the EU and therefore improve the prospect of the Euro in the longer term.

For more information on how future data releases could affect your currency requirement, call our trading floor 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.