This Euro report will examine the factors that could affect exchange rates this week to help you stay informed if you need to make a currency transfer. the table below shows the difference in Euros you would have achieved when buying £200,000.00 during the high and low points of the past month.

Currency Pair% ChangeDifference on £200,000
GBPEUR1.3%€2,900
All Eyes are on Germany

SPD votes in favour of coalition discussions

Yet more positive news is likely to strengthen the Euro further, as last night it was announced that Germany’s coalition government is another step closer to being agreed. The Social Democratic party have voted in favour of starting talks with Angela Merkel and her Christian Democratic party, after four months of uncertainty. The Social Democrats (SPD) voted 362 for moving forward with negotiations, versus 279 against, and as Germany is the Powerhouse of Europe this will likely mean an even stronger Euro as we begin the week. Coalition discussions are now expected to begin this week and the SPD will have a final vote on a deal once this is agreed, which Angela Merkel is pressing for by mid-February.

The Euro has had an excellent start to the beginning of the year, especially against the US Dollar with Interbank levels remaining close to a 3 year high for the world's most traded currency pair.

More positive European economic data expected this week

Economic data which could affect the Euro this week includes an Economic Sentiment report released on Tuesday at 10am, and Consumer Confidence index which are both expected to bolster the recent positivity from the Eurozone. On Wednesday Markit will release their Services PMI (Purchasing Managers Index) which is expected to show a slight decline in January compared to December.

Perhaps most importantly, on Thursday the European Central Bank will announce their latest interest rate decision, followed by a policy statement and press conference. Although no change in interest rates are expected, any further hints towards adjusting the ECB’s current €30bn per month bond buying programme will be keenly watched for by investors. Mario Draghi will be speaking at 12.45pm and is likely to cause volatility for Euro exchange rates. Clients looking to buy Euros may benefit from doing so earlier this week, to limit themselves from any further potential losses.

For more information on how future data releases could affect your currency exchange, 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.