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 in Euros you would have received when buying £200,000 at the high compared to the low for the past month.

Currency Pair% ChangeDifference on £200,000
GBPEUR5.63%€15,520
What happens next with Brexit? Unfortunately for anyone selling Pounds to buy a foreign currency, the uncertainty doesn’t stop there. If a deal can be reached on Sunday the withdrawal treaty, which has already been agreed in principle on the Irish border and £39bn financial settlement, and declaration on future relations will then be put to the House of Commons so that they can have a meaningful vote on the deal. This should happen next month and May is likely to face even bigger obstacles here than she has from the EU. If she cannot get the House of Commons to agree a deal then it looks as though the options are a no deal Brexit, or ‘no Brexit at all’ according to Mrs May yesterday when she clashed with Jeremey Corbyn before heading to Brussels.

Brexit transitional talks strengthen the Euro

The Euro finished last week on another high against the Pound, after the UK released some less than impressive data on Friday, and Brexit negotiations continued to weigh down the value of Sterling. EU chief Brexit Negotiator Michel Barnier, and UK Brexit Secretary David Davis, were once again at loggerheads regarding the transitional Brexit agreement, and if a resolution is not found this could mean that the March deadline is not met. One factor which has been holding the Euro back from making substantial gains of late is the ongoing uncertainty around Germany’s government coalition with the Social Democrats (SPD). Chancellor Angela Merkel has defended her choices for the ‘painful’ concessions required in order to strike a deal, which still needs to be agreed by 460,000 SPD members in March.

Brexit negotiations are also continuing to have an impact on Euro exchange rates, and this is expected to continue over the coming weeks.

Prime Minister Theresa May will be giving a speech in the next few weeks, although no date has been set for this as yet, with Boris Johnson beginning a series of speeches outlining ‘the road to Brexit’ on Wednesday. If these provide clarity and positivity on what Brexit will mean for the UK, I would expect GBP/EUR to strengthen back towards 1.15, therefore clients selling Euros may wish to take advantage of the current levels to limit themselves from potential losses.

Inflation and Growth figures could be the Euro’s main driver this week

Looking at economic data releases which could impact Euro exchange rates for the week ahead, on Wednesday Inflation readings for Germany will be released. This is of high importance as Germany is the Eurozone’s largest economy, and any deviation from the 1.4% expected could result in swings on Euro exchange rates. GDP (Gross Domestic Product) figures for the whole of the Eurozone will also be released, showing the percentage of growth for the final quarter of 2017. Get in touch with your Account Manager today to help you to plan around these events.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me 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.