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In recent weeks the euro has been losing ground against the US dollar and at present the EURUSD interbank rate has dropped to a twenty-month low. As EURUSD is the most traded currency pair globally it’s important to keep an eye on this pair when trading euros with any other currency.

Currency Pair% Change (Month)Difference on £200,000
GBPEUR2.25%€4,980

It’s clear to see that the euro has problems at present. Italy is in recession, the German car industry is struggling, the socialist party failed to win a majority in the Spanish election this weekend therefore they are trying to form a majority Government with other parties, the European Central Bank is concerned about growth and announced in March that they would start the next targeted longer-term refinancing operations Targeted Longer-term refinancing operations (TLTRO) program where the Central Bank provides cheap loans to bank in a bid to stimulate growth and the list goes on. In addition, the US dollar has been going from strength to strength and only last week US Gross Domestic Product (GDP) numbers sent shockwaves through the market. The numbers were released at 3.2% when many forecasters were suggesting a recession was on the horizon.

Pound losing value against the Euro

What to expect this week for GBP/EUR exchange rates?

Even though the euro is struggling against the US dollar, pound to euro exchange rates have dropped in recent weeks. GBP/EUR interbank exchange rates have dropped 1 ½ cents since the UK extended Article50 by 6 months. This week UK Prime Minister Theresa May is set to continue the negotiations with Labour. So far progression appears to be limited as the pair can’t come to an agreement in regards to a customs union. My personal opinion is that it’s a matter of time until the Prime Minister goes back to Parliament and asks all MPs to vote again on an alternative as the negotiations will be over. If this materialises the pound could face further pressure against the euro.

Also this week European GDP numbers are set to be released at 9am Wednesday morning. Yearly GDP is set to remain at 1.1% however quarterly GDP is set to rise slightly to 0.3% from 0.2%. If this occurs the euro could have a good start to the day against the pound. However, the US are set to release their latest interest rate decision Wednesday evening. With US GDP exceeding expectation last week, it could be difficult to see how the central bank will remain as dovish as they have been. Therefore, this may see EURUSD fall further and consequently GBPEUR rise. For clients that are selling euros this week an opportunity may present itself Wednesday morning.

News

Sterling Exchange Rates Fall Below 1.15 Against the Euro

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This week, UK economic data has done little to support GBP rates, as the Eurozone vaccination rollout speeds up, causing sterling to slip lower against the euro.

By Tom Holian
Sterling Becomes Worst Performing G10 Currency This Month-to-Date

Sterling Becomes Worst Performing G10 Currency This Month-to-Date

The pound has hit a seven-week low against the euro and an eight-week low against the USD in recent days.

By Oliver Godwin
GBP Reaches 6-Week Low Against the Euro

GBP Reaches 6-Week Low Against the Euro

Sterling continues on the backfoot this week following its GBP/EUR 12-month high of 1.18 last week.

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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.