Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting Pound Sterling rates when buying £200,000 during the high and low points of the past month:
|Currency Pair||% Change||Difference on £200,000|
The Euro is performing well despite renewed uncertainty this weekend as Spanish Prime Minister Rajoy made plans to sack the Catalan government. The Euro has so far avoided much of the backlash from this situation but that could quickly change. Together with other politically uncertain elements in the EU such as the far right presence in German and Austrian politics, this situation paints a slightly less favourable view of the Euro.
Thursday this week sees possibly the most important economic event of the year concerning the Euro. The European Central Bank (ECB) will meet to provide its latest interest rate decision at 12.45 and Press Conference at 13.30. The outcome of this meeting is critical to clients buying or selling Euros in the coming weeks and months, if you are looking to buy or sell Euros at a better level this meeting could be what you have been waiting for.
Many commentators believe the ECB will announce a reduction in their Quantitative Easing (QE) program by €20-€30bn per month and perhaps extend it for some months (possibly 9) from January.
One of the reasons the Euro has been so strong in 2017 is the belief that the ECB are putting themselves and the Eurozone on a path to normalising interest rates. This belief could quickly change however.
GBPEUR is a very tricky one to predict at present with numerous issues influencing direction, but Thursday could easily see the Euro stronger. With the UK and US mired in political uncertainty the Euro has almost become more of a safe haven in 2017 and its strength should not be underestimated, particularly by clients buying Euros with pounds who keep getting their fingers burnt holding on for higher rates.
In such times a Stop / Loss guarantees a minimum level and a Limit order can be used to guarantee a maximum level. These can be used together to protect a range of exchange rates and could be very useful this week. A Forward contract is another great tool to help lock in or protect an exchange rate where full availability of funds is not possible. Please call our team to discuss this further or visit our contract options page to read more.
Whilst there is scope for a stronger Euro, the uncertainty over the amount of any taper plus for how long could see excessive volatility on Thursday. You can argue a strong Euro is priced in so whilst on the face the event could be Euro positive, should there be any disappointment the Euro could weaken too.
Euro strength seems the more likely outcome from Thursday but is not a foregone conclusion. Speak to your account manager to be kept up to the latest news ahead of this crucial developments on the Euro and GBPEUR exchanges.
For Euro buyers we have come up almost 6 cents from the lows a few weeks ago meaning buying €100,000 today is some £5000 less costly. If selling €100,000 today versus before the Referendum you are getting an extra £14000. I will let you decide if those figures are impressive or not!
Thank you for reading my Euro currency report, I'd be happy to answer any queries you have about an upcoming transfer, feel free to get in touch on 01494 725 353 or email me here.
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