Last week the ECB confirmed that they planned to finalise their bond buying purchases by the end of this year, but remained committed to keeping interest rates on hold until towards the end of 2019 which saw the Euro weaken slightly against Sterling. The Euro report below discusses how this update as well as economic data could impact the single currency. The table shows the range of exchange rates for GBPEUR during the high and low points of the past month, highlighting the importance of timing your transfer correctly to maximise on your return.
|Currency Pair||% Change||Difference on £200,000|
This fairly dovish stance was confirmed yesterday after Germany’s inflation highlighted a slowdown to a three-month low for July, which has been largely attributed to a fall in the cost of clothing for the period.
Despite this seemingly negative news this has done little damage to the Euro’s strength against the Pound, which is being held back by cautious investors ahead of Thursday’s interest rate decision from the Bank of England.
The Eurozone now looks set to be on a divergent path regarding monetary policy compared to both the UK and US, with the BoE looking likely to raise interest rates to 0.75% this week and the Federal Reserve set to potentially hike twice more before the end of this year and this could harm the value of the Euro in the future.
The Euro could also come under some pressure, especially against the Dollar, after today’s Gross Domestic Product, unemployment data and inflation figures. All of these are expected to be worse off compared with previous figures which could therefore see the Euro fall and offer a spike for clients buying Euros.
Any clients selling Pounds to buy Euros may be wise to move on any potential spikes that we see today before the BoE decision on Thursday which could pave the way for Sterling volatility. If you are in the process of buying a property in Euros and don’t yet have full availability of funds, a forward contract could help you to secure your purchase now and protect your position from potential Sterling weakness later this week.
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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