This Euro report will examine the factors that could affect exchange rates in the short term to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received in Euros when buying £200,000 at the high compared to the low for the past month.

Currency Pair% ChangeDifference on £200,000
GBP/EUR2.94%€6,602
QE tapering now a possibility by the end of the year

Will Draghi taper ECB’s QE Programme?

The Eurozone economy is performing remarkably well of late, and investors are keenly waiting for any news that the European Central Bank will look at tapering the current Asset Purchasing programme, which was already cut from €80bn a month to €60bn in April. This programme, also known as Quantitative Easing (QE), is where the Central Bank creates new money to purchase government bonds in order to increase spending and raise inflation.

ECB President Mario Draghi will be attending the Jackson Hole Symposium in Wyoming, USA, which begins on Thursday, where world economic leaders will come together to discuss future issues and trends. It will be particularly interesting to see whether Mario Draghi uses this as an opportunity to announce a tapering of the current programme, as he did in 2014 when he hinted towards the launch of the ECB’s huge bond buying programme.

When will the ECB’s QE Programme be tapered?

However, even if this isn’t discussed at this event, the ECB will need to taper this at some point soon, as the central bank are running out of bonds to purchase. The rules, set out by the ECB itself, restrict them to only buying a third of each country’s debt, but German Bunds and Portuguese debt are both beginning to run low.

If the current programme is tapered, I would expect this to significantly strengthen the Euro, due to confidence that the economy is fully back on track. Any clients who are looking to purchase Euros with Sterling may look at doing so sooner rather than later, to protect themselves from any further potential losses.

This morning at 10am, ZEW are set to release their Economic Sentiment survey for Germany and the Eurozone, which are both expected to show a decrease compared to the previous month. Tomorrow also sees a whole host of key economic data including Services and Manufacturing data at 9am. If either of these releases are better than the previous, we could see GBP/EUR fall to 1.08 for the first time since 2009, therefore clients wishing to buy Euros may look to do so before these releases.

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 here.

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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.