Understandably, German politics have been taking most of the headlines and have aggressively pulled the Euro onto the back foot to start the month as a result. The Euro report below looks into the way this political unrest is impacting the Euro; the table below shows the difference in Euros you could have achived when selling £200,000.00 during the past week, and the range of exchange rates available during that period.
|Currency Pair||% Change||Difference on £200,000|
It seems even the middle ground between the Chancellor’s stance and that of her counterpart’s Seehofer could still harm the Bloc’s unity long term.
Merkel seems to have part-entertained the interior minister’s idea of discriminately turning away migrants based on their track record and potentially undermining the free movement of people, a fundamental pillar of the European bloc, with the short-term solution looking like Asylum camps placed along the borders of Germany.
Of course, the markets haven’t reacted well with the Euro falling against the majority of its major currency counterparts, most notably against the Dollar, having already surrendered over 35% of last week’s gains.
Interestingly, GBPEUR rates have remained fairly flat however which for me is a reflection of the times: It’s hard support Sterling on the back of opposing political turmoil whilst domestic news remains far from rosy.
That being said, those holding Euros should certainly take note of that movement against the Dollar, there is little doubt that the Euro’s hand has been weakened.
Concession talks will continue to take place in the early stages of this week, the results of which have real potential to bring volatility to Euro exchange rates. Those looking to sell Euros may want to limit their exposure before the uncertainty begins to take hold.
Despite the lack of punch form sterling so far, there is every chance the political clouds from Germany will begin to weigh on investor appetite which will become all the more sensitive to dubious economic data.
The markets will have taken note of the Euro’s weak manufacturing figures during yesterday’s trading with French factory activity falling to 16-month lows as a result of the drop off in demand with trade tariffs being placed left, right and centre.
For this reason, tomorrow’s Markit Services data will hold particular relevance. If yesterday’s manufacturing data is anything to go by, Euro buyers may well be gifted with an opportunity to maximise their returns. Those looking to buy euros with pounds may be wise to get in touch today to plan around this event.
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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