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 30 days affecting Euro rates when buying £200,000:

Currency Pair% ChangeDifference on £200,000
GBP/EUR3.41%€7,560
Italian finances a worry for the future

Why is the Pound extremely weak against the Euro?

For clients that are transferring pounds into euros for their dream property within Europe, a common question that I am being asked is whether the property will be cheaper or more expensive in the months to come. To make a prediction we need to understand the fundamentals to why the euro is currently extremely strong against the pound at the moment. I believe there are three main reasons. Firstly, the pound has plummeted in value because of Brexit and at the moment UK and EU negotiators cannot come to agreement about EU citizens’ rights or the amount of money the UK will pay to leave the EU. In addition, inflation has fallen and the chances of an interest rate hike anytime soon diminished yesterday.

Secondly, President of the European Central Bank Mario Draghi has hinted towards making arrangements to taper the quantitative easing program in the autumn as growth is continuing to improve across the economic area.

Thirdly and in my opinion the main factor to why GBPEUR exchange rates have dropped 6 cents in three months is due to the strong investor flows out of the US dollar and into the Euro. The Trump administration continues to put pressure on the US dollar because of the Russian scandal and his failure to pass new legislation. Couple this with core inflation falling and therefore a dovish interest rate statement last week EURUSD exchange rates have risen an astonishing 12 cents in three months.

GBPEUR moving forward

Currently GBPEUR exchange rates are trading at their lowest levels since 2011 apart a brief period in October last year. For any client that is selling euros to buy pounds rates are extremely attractive due to the Brexit discount and as experienced traders will know the direction of exchange rates can change very quickly.

With that aside in current market conditions I find it difficult to see how the pound is going to make any substantial inroads against the Euro. However if US economic data begins to improve and Donald Trump’s administration gets there act together, I expect some of the currency flows to be reversed and therefore the euro weaken against sterling. My prediction for the month is that GBPEUR exchange rates fluctuate between 1.10 and 1.1350.

Next week is quiet for Eurozone economic data releases, the key numbers to look out for are German and French Trade figures released at 7am Tuesday morning.

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 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.