Yesterday ZEW (Centre for European Economic Research) released its Investor Confidence survey for the whole of the Eurozone, which although released worse than expected, the same survey for Germany came out far better than the previous and expectation, rising for the first time in 4 months. As a result, the Euro strengthened against the Pound yesterday and provided another opportunity for our clients selling Euros to take advantage of.
This table displays the GBP/EUR movement over the last month and shows the difference you would have received when buying £200,000 at the high compared to the low:
|Currency Pair||% Change||Difference on £200,000|
This Investor confidence is key and comes at a time when Germany are due to go to the polls for the German election this Sunday. Angela Merkel stands a high chance of being re-elected for a fourth time as the German Chancellor, with the latest polls putting her and the Christian Democratic Union party ahead with 36% of votes, whilst the Social Democratic Party is currently at 22%. It is expected that she will form a coalition government – potentially with the Social Democratic Party once again, or with the smaller Free Democratic Party and Green party.
If Merkel is voted to remain Chancellor for another term, this would likely strengthen the Euro, however as we have witnessed in recent times, General Elections have the capability to cause a huge amount of volatility for exchange rates, especially if the outcome is not quite as expected.
In the meantime, and looking at the week ahead, the European Central Bank’s Economic Bulletin will be released tomorrow and will provide a clear picture of the overall Eurozone economy. This is followed by a speech by ECB President Mario Draghi at 2.30pm, and should any hints towards tapering of the current Quantitative Easing programme be made, we could see the Euro strengthen once again, potentially back towards 1.10.
With exchange rates at the mercy of so many different political and economic factors, detailing any Euro buying or selling requirements to your Account Manager here can allow us to help you to trade at the best levels, through the use of one of our many different contract options. Get in touch with us on 0044 1494 725353 today to find out how we can help you.
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