This Euro report discusses factors that could affect EUR exchange rates in the near future. In the table below you’ll see high to low GBPEUR exchange rate movement when exchanging £200,000 to Euros this week:

Currency Pair% ChangeDifference on £200,000
GBPEUR3.76%€8,180

This week the Pound has soared against the Euro due to positive UK economic data. Inflation has risen to 2.9% which has prompted the Bank of England to announce an interest rate hike may occur in November. Looking further ahead I expect two key events to influence the direction of GBPEUR exchange rates for the remainder of the month and they are Theresa May’s speech on the 22nd September and the German Election on the 24th September.

UK Prime Minister Brexit speech

Theresa May is set to deliver a Brexit speech in Florence on the 22nd September, in a bid to outline life after Brexit. The Prime Minister has made it clear she wants the UK to have a special partnership with the EU, however EU negotiators have insisted the deal the UK want will not materialise unless the Brexit divorce bill alongside the protection of EU citizens’ rights is sorted. The reason why I expect this event to have a major impact on exchange rates is because EU Parliament negotiator Guy Verhofstadt has insisted Theresa May will make an “important intervention”.

Where next for Germany?

German Election

For clients that have been trading for many years they will know that General Elections cause volatility for exchange rates and I expect this election could cause further volatility as the result could have a major impact on the future of the European Union. Over the past four years the two main parties Christian Democratic Union and Social Democratic Party have formed a coalition even though their policies do not align. Reports are suggesting that both parties are looking to form agreements with the smaller parties as neither party want to form a coalition and the likelihood is neither party will win a majority. Both of the main parties are Pro EU therefore this election does not pose the same threat of another EU referendum like the French or Dutch election. Nevertheless now that many of the countries are providing ideas to reform the EU, Germany will have a significant role as they are the powerhouse.

In regards to GBPEUR exchange rates, German Chancellor Angela Merkel is one of the most powerful people on the planet. If she is re-elected I expect the Euro to strengthen. Any other outcome could lead to an uncertain period for the Euro.

Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me with any queries at drl@currencies.co.uk.

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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.