The Euro's strength has been highlighted as a worry by Mario Draghi, as exports from the EU decrease due to the increasing price. the latest Inflation data is due out this afternoon; this Euro report discusses how this could affect the Euro moving forward. The table below shows the difference you could have achieved when buying £200,000.00 during the high and low points of the past 30 days.

Currency Pair% ChangeDifference on £200,000

Problems for ECB President Mario Draghi

Over the last 12 months the Euro has been one of the best performing G10 currencies. Growth numbers for Europe are currently at 10-year highs and Unemployment currently sits at the lowest levels since the financial crash. Analysts are suggesting that the Quantitative easing program that President of the European Central Bank Mario Draghi implemented back in 2015, has given the injection, which has kick started the economy.

Global tensions handicapping euro prospects

However, it’s not all smiles for the President and the Europeans. The ECB minutes released yesterday suggested that the ECB are concerned that the US are artificially weakening their currency which is strengthening the Euro. Mr Draghi is totally aware that European exports are under severe pressure due to the strength of the Euro and there’s an argument to suggest that the President has used all of his tools that could devalue the Euro. Interest rates remain at record lows and the injection of quantitative easing tends to actually weaken the currency as there is an increased money supply. One topic that Mr Draghi may try to target if he plans to devalue the Euro, is the inflation outlook which is a concern for the European Central bank due to the appreciation of the Euro.

With the economic data releases continuing to impress you could expect the Euro to continue to perform well throughout 2018.

The latest inflation numbers are set to be released at 1.30pm today, if we see a slight decline I expect to hear some commentary outlining the ECB’s worry which should relieve some pressure from the Euro.

GBPEUR short term and medium-term forecast

As Foreign Currency Direct plc is a UK currency brokerage, the main currency that we trade euros with is the Pound. As I have stated I expect the euro to continue to perform well against the G10 currencies, however I expect it’s a matter of time until the Pound makes inroads against the euro. Brexit negotiations have been driving GBPEUR exchange rates over the last 2 years and the on-going transitional talks which according to the UK Prime Minister will be finalised before the end of March, I expect will give the Pound a boost. However, in the meantime Euro sellers may be provided with a window of opportunity the longer the negotiations go on without a resolution. All eyes turn to Mrs May’s cabinet meeting and speech next week.

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.