This report will address the factors that are likely to affect Euro exchange rates this week if you are buying abroad or making a currency transfer.

Recent improvement for the EUR should be taken advantage of

The Euro (EUR) continued its march last week and despite a small fight back from Sterling, the general trend since the turn of the year has certainly been positive for those converting Euros to Pounds. We’ve discussed at length the reasoning behind the recent EUR improvement but the key question now is whether this trend will continue, or has the EUR reached its limit in the short-term?

As I’ve mentioned I now expect the Pound to find support around 1.30. Although we did see this level breached last week, it wasn’t sustainable under current market conditions and the Pound bounced back almost instantaneously. The current range indicates that the GBP/EUR exchange rate may be finding its level and I wouldn’t be surprised if 1.30 becomes the benchmark for GBP/EUR over the coming months.

Looking at the Eurozone and despite an improvement in their economic output, we are not witnessing anything ground-breaking in terms of a leap forward. The current trend on GBP/EUR indicates a lack of confidence in the UK economy, not an overriding feeling that the Eurozone has solved all of its fiscal problems. Inflation levels remain a concern and as we can see on EUR/USD, the single currency is still struggling to make any serious impact.

There is little data of note for the Eurozone this week, so tomorrows Consumer & Industrial figures are likely to dominate headlines. Both are expected to show a negative reading, which could in turn put pressure on the single currency.

For news on upcoming data releases that could affect foreign exchange rates, call our trading floor on 0044 1494 725 353 or email me here.

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.