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% ChangeDifference on £200,000
GBP/EUR1.45%€3,360
Trade Wars threaten EUR?

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.

Has the ECB been too optimistic once again?

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.

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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.