This Euro report will address the factors that could have an effect on Euro exchange rates over the coming weeks. The table below looks at the difference between the rate you would have achieved when purchasing £200,000.00 at the low and high levels during the past week.

Currency Pair% ChangeDifference on £200,000
GBPEUR4.42%11,520 USD
Concerns over Italian deficit

Spanish fears could see the Euro weaker

Political uncertainty on the Euro stems from the recent German election and the Catalan Independence Referendum. Both events are yet to fully resolve themselves and could be greater causes for concern on the Euro in the future. The Catalan parliament are reported to be planning to declare independence as early as Monday although Spain’s Prime Minister has threatened to impose direct rule over the region. Whilst the Referendum was deemed illegal and turnout low the prospect of Civil war in Spain seems a real possibility, already Spanish borrowing costs and banks operating in the Catalan area have been affected. Whilst this uncertainty has seen the Euro weaker it has not helped clients buying Euros with pounds so much since the pound is struggling under the weight of its own political concerns.

If you are selling Euros to buy pounds or have funds in the Eurozone to repatriate to the UK, you are still doing very well. Today €100,000 is buying £12,000 more than before the Referendum last June.

ECB decision QE key for the rest of October on the Euro

A key factor bolstering the Euro has been the prospect of the European Central Bank withdrawing their Quantitative Easing QE program. The meeting on the 26th October will be vital for the Euro therefore as we learn as to what extent the ECB will perform the taper. Essentially tapering the QE will see the Euro stronger as it puts the ECB and the EZ on a path to raising interest rates in the future If you have a transfer to make buying or selling Euros this is the key information to watch for.

The ECB meeting is crucial to the Euro whilst the UK interest rate decision in November is crucial to the pound. I personally see more chance of the ECB acting which would on the face of it mean a strong Euro and weaker pound. It is not just the assessment of the two key economic policy decisions which leads me to think the Euro will be stronger.

Politically, the perfect façade embodied by Angela Merkel and Macron, has been shaken by the German election and Spanish concerns. Ultimately though, I feel the political uncertainty in the UK will cause greater concerns and sterling to fall against the Euro.

Will GBPEUR rise or fall in the coming weeks?

If you need to buy Euros with pounds or sell Euros for pounds we now have what could be some of the biggest opportunities of 2017 left. There has been mounting speculation the ECB will taper for months and there has been mounting speculation on the UK hiking rates on and off for the last few years.

With such high expectations in certain quarters, combined with the reality that nothing is guaranteed, comes real potential for some unexpected swings. More often than not on exchange rates the movement comes from something unexpected or a failure to meet with initial expectation.
If you need to make a GBPEUR or EURGBP transfer before the end of 2017 or early 2018, decisions in the next few weeks are of huge importance to the future forecast.

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 on 01494 725 353 or email me here.


Read more articles
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.