The single currency has been much weaker in recent weeks presenting fresh opportunities for realistic Euro buyers. A key component of this has been a big shift on EURUSD as investors fear an all-out Trade War between the US and China will harm the Eurozone. Mario Draghi and the ECB (European Central Bank) have also stated they are less likely to raise interest rates in the future because of the uncertainty this creates. Our Euro report below discusses the many factors impacting the Euro currently; the table below shows the range of exchange rates between GBP and EUR, and the difference in return you would have received from £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
Today there is no significant Euro data but we do have a speech by Mario Draghi at 14.30 which will be interesting to gauge given fresh comments from Donald Trump threatening this extra $200bn of tariffs on China. GBPEUR buyers and sellers should take note of the Bank of England meeting tomorrow and parliament vote on Brexit.
Whilst many clients buying Euros are gingerly hanging on believing current levels of 1.13-1.14 might improve, it is worth pointing out these are not too far off the highs of the last year. Further, at this time last year many believed GBPEUR would rise higher but in fact by August we had dipped to 1.075. Clients buying €100,000 today are still £5000 better off compared to these lows. If you have a GBPEUR requirement make sure you are in touch with your account manager as the next 24 hours could be quite volatile.
Economic policy from the ECB has also been key with Mario Draghi looking to withdraw the QE (Quantitative Easing) program and increase interest rates. Whilst the ECB have now put in firmer plans to withdraw QE by the end of the year, by stating interest rates might not be raised until the end of 2019, the Euro is lower.
Many analysts had been expecting some loose progression towards a rate hike by the middle of 2019. What I found very interesting from the meeting last week was the ECB cut growth forecasts for 2018 from 2.4%, down to 2.1%. But, they didn’t change their growth forecast for 2019 or 2020. The reasons for the cut this year are increased economic uncertainty and a weaker impetus to trade, partly down to the Trade Wars emanating from Trump. I think much of this uncertainty could continue into 2019 and provide more questions for the ECB to answer.
Italian politics and questions of the Eurozone’s Immigration plans are also all presenting many questions for European policy makers. If you have any Euro trades buying or selling for the future, please get in touch to discuss what lies ahead and how to maximise your rate.
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.
Jonathan Watson as ever, ensures a smooth, reliable and trustworthy transaction for the second time of service! Delightful to deal with – efficiency personified. Thank you Jonathan. Would recommend highly – 5Star.
Excellent initial guidance, and during the transaction regular communication and updates. Dealing with Jonathan Watson was a pleasure. Very reassuring.
Jonathan Watson provided very helpful advice throughout the process, as well as immediate responses to our inquiries. He and his team were patient and thoroughly professional, which helped us through some stressful moments following the sale of our property in France.