This Euro report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low yesterday.
|Currency Pair||% Change||Difference on £200,000|
Historically, political uncertainty will weaken the currency in question and there is no doubt that there is a feeling of uncertainty surrounding how a coalition government for Germany will be formed. It is expected the coalition will consist of the Christian Democratic Union (CDU) headed by Angela Merkel, The Free Democratic Party (FDP) and the Greens.
The uncertainty surrounding who will take control in Germany did cause a slight weakening for the Euro against Sterling but it did not have the same impact as the recent uncertainty surrounding UK election for example. Despite Germany being the engine room of the Eurozone, it is still only one member of the block.
Investors keen to hear from Draghi, regarding the tapering to the current QE program. Quantitative Easing is an unconventional method of monetary policy in which a central bank purchases government securities or other securities from the market in order to increase money supply and hopefully boost the economy.
Economic data from the Eurozone has been mainly been positive of late, both geographically and across varied industry sectors, something that has not been the case in the past.
Current monthly increments are set at €60bn if Draghi announces there is justification to taper this sum expect Euro strength. The amount indicated will dictate by how much.
Consumer Price Index (CPI) data is due today. It is a measure of inflation and is a key barometer as to the health of an economy. If there are large changes to previous results it can create volatility. I would be surprised to see any significant change, possibly a slight increase which could cause slight Euro strength.
Thank you for reading my Euro currency report, if you have any questions about Euro exchange rates I would be more than happy to discuss them – you can contact me with any queries on 01494 725 353 or email me here.
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