Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting Pound Sterling rates when buying £200,000 during the high and low points of the past 3 weeks:

Currency Pair% ChangeDifference on £200,000
GBPEUR2.4%€5,600

It has been a volatile start to December for Euro exchange rates having already tested the mid 1.11s and the high 1.14s against the Pound in the last 2 weeks alone.

The majority of it is Brexit driven of course but there are evidently a number of key political issues that have lead the markets to grow ever so sceptical with the single currency of late.

All Eyes are on Germany

German coalition still in question

Acting as the engine room for the Eurozone, political unrest in Germany often means trouble for the value of the Euro. Wednesday's coalition talks between Merkel's conservatives and the SDP will probably be having an impact on rates. There already seems to be clashes regarding how issues surrounding Europe should be viewed, with senior conservatives already categorically rejecting the SDP's vision for a future Germany acting as the “United States of Europe”.

It goes without saying the markets will likely be listening carefully and any ripple of unrest could well sap investor confidence in the Euro.

If you are looking to sell Euros short term, it may pay to act before talks start on Wednesday to eliminate your exposure.

Economic data drives underlying Euro value

Along with political news, Germany will also be taking centre stage economically in the early stages this week with investor sentiment releases due out on Tuesday along with key inflation data due Wednesday. Both will hold particular relevance given Germany's inconsistency throughout 2017.
If the European central bank is to give any thought into re-evaluating its monetary policy, German needs to be firing strongly.

Although I expect very little change in stance from the ECB on Thursday, I would expect investor confidence to continue on its upward trend. As such if you are looking to buy Euros, it may pay to capitalise on the uncertainty at the start of the week. Feel free to get in touch for more information on how political events in Europe are likely to affect Euro exchange rates on 01494 725 353, or via email on bts@currencies.co.uk.

News

Read more articles
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.