This Euro report will examine the factors that could affect exchange rates this week. The table below shows the difference in EUR you would have achieved when buying £200,000 in the past month.
|Currency Pair||% Change||Difference on £200,000|
The French Parliamentary elections will enter their second round on Sunday 18th, and this could be a bolstering point for the Euro.
The new President, Emmanuel Macron, looks on course to win a landslide victory for his newly formed party, La République en Marche. He needs this majority to push through promises in his campaign - reducing public spending, cutting the hefty amount of public servants in France, as well as reforming the labour market.
Effectively these are all very pro-business in a country which is trying to re-market itself in the post-Brexit era as a potential opportunity for international companies. GBP/EUR fell by around 2 cents upon his election, when it is confirmed he can govern effectively it is likely that you will see further improvements in the Euro’s value.
Yesterday business confidence data reflected this atmosphere of optimism rising in the Eurozone recently. German data in particular impressed market analysts and the Eurozone as a whole fluttered slightly higher than May’s readings. This is one of the reasons why the Pound’s rally against the Euro was limited to half a cent yesterday.
However, today we will be seeing inflation data for Germany and industrial production data for the Eurozone constructing a far more negative narrative for the single currency. Germany continues to flirt with deflation and industrial production growth in the Eurozone is set to decrease by almost 50% in a single month.
With the positive run for Sterling this lacklustre Eurozone data may combine to create some tempting opportunities for Euro buyers preceding the weekend. It may be wise to take advantage of any spikes in case the French Parliamentary elections see GBP/EUR gains evaporate from the opening bell on Monday.
Conversely Euro sellers might wish to consider looking at a live exchange rate first thing this morning by contacting their broker. It is difficult to gauge whether the expected gains on Monday will outweigh the projected losses heading into the weekend.
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