This report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low during the past 30 days.
|Currency Pair||% Change||Difference on £200,000|
Last month President of the European Central Bank (ECB) Mario Draghi announced that the ECB would essentially provide the market with further information surrounding the quantitative easing program. Currently the ECB injects €60bn into the bloc in a bid to stimulate growth and improve inflation levels.
Tuesday morning at 11am, the Eurozone will release their latest inflation numbers and this release could have a direct impact on monetary policy decisions towards the end of the month. Forecasters believe inflation will remain steady at 1.6%.
With inflation rising over the last 18 months and the ECB president continuously stating he is happy with the growth figures within the Eurozone, I believe tapering of quantitative easing is likely but I don’t expect this to happen until quarter one or two of next year.
This week, key European leaders will meet in Brussels at the Extraordinary summit from Wednesday to Friday. Key topics that are planned to be discussed are migration, defence, foreign affairs, Catalonian independence and most importantly Brexit negotiations. EU head negotiator Michel Barnier will give a speech and outline the progress made between the UK and EU, however the comments he made last week, suggesting the UK's and EU's negotiations have hit a brick wall, this event has the potential to shift GBPEUR exchange rates by a matter of cents. The only saving grace is that Mr Barnier did also say last week that a transitional period for the UK is an option however reports are suggesting that key countries like Germany and France are opposing the idea.
Due to Mr Barnier's comments towards the end of last week, throughout Thursday and Friday's trading session GBPEUR exchange rates fluctuated close to 2 cents. Some of my clients that needed to purchase last week used our limit order contract, and as the market peaked in favour of euro buyers and sellers at one point throughout the week our automated systems managed to secure clients an extra cent or two on their exchange.
As this week is expected to be another volatile week, I would recommend the use of limit orders. For more information feel free to call the trading floor on 01494 725 353 or email me here.
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