This Euro update examines factors that could affect exchange rates in the coming weeks. In the table below you’ll see high to low Euro exchange rate movement when exchanging £200,000 to Euros for the current year to date.
|Currency Pair||% Change||Difference on £200,000|
Yesterday analysts at investment bank UBS gave some startling price forecasts for the Pound to Euro exchange rate this year, whilst also offering their reasoning behind the predictions.
They offered a number of potential outcomes but the most startling was the Pound to Euro rate falling below 1 for 1 within a year. This could happen if UK corporates see a reduction in revenue generated overseas and also if a Hard Brexit approach results in adverse trading conditions.
Their best case scenario for the Pound against the Euro is a move above 1.20 which isn’t a trading level we’ve seen in around 11 months now. This outcome would be brought upon GBPEUR if UK corporates continue to see large inflows which of course is dependent on trading conditions overseas. Interestingly UBS believe the Pounds recent climb (prior to the narrowing in the election polls) can be put down to this very reason.
Inflation levels within the Eurozone have recently dropped to 1.4% down from 1.9% around this time last year. This is below the European Central Banks target of 2% and therefore reduces the chances of the ECB limiting its current QE program.
Despite the drop four members of the ECB discussed the possibility of tapering the current easing program, and although I don’t expect changes in the immediate future I do think that the Euro could spike upward in the wake of QE tapering.
Later this morning at 10am Producer Price Index figures will be released for both the year and the month of April. The figures will cover the change in prices for domestic producers of commodities and increases are expected but expect any deviations from these forecasts to result in movement for Euro exchange rates.
For more information on how future data releases could affect your Euro requirement, call our trading floor on 01494 725 353 or email me here.
My experience with Foreign Currency Direct has been excellent, and my account Manager Joseph Wright has been First Class. He has provided me with all the information that I needed, in a very clear way, that made it easy to understand.
Successful transfer to France. I have used Foreign Currency Direct several times. Nothing is too much trouble to explain, and when it comes to the actual transfer, it takes place on time without fuss. Never had a problem. Thank you Joseph!
Very efficient and responsive. We had great service from Joe Wright who helped us (patiently and with humour) through our currency purchase and was then able to guide us through the process of sending money to France for our property purchase.
Joseph treated us very professionally as well as friendly, and advised and went beyond his duty. Would recommend and use him again.