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 during the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBPEUR3.2%€7,140
US Inflation rocks markets

Eurozone and UK inflation data

Similarly to the Pound, the single currency’s value could also be affected by inflation data this week, with Eurozone Consumer Price Index data released this morning. Mario Draghi, Head of the European Central Bank, has previously alluded to the fact that the €60bn per month of bond purchases could begin to be tapered as early as this month, with their next monetary policy meeting coming up next week. In order to do this, they may want to see a rise in inflation first, making today’s figures all the more influential. With such important data releases today for the UK and Eurozone it could be extremely volatile for GBP/EUR rates and there could be spikes to take advantage of on either side of the coin. Mario Draghi will be speaking tomorrow morning following the data release and his comments could cause large shifts in the Euro’s value.

When Mario Draghi spoke at the beginning of September and hinted towards a tapering in the ECB’s QE programme we saw the Euro gain by almost a cent against Sterling and offering some excellent opportunities for clients buying Pounds.

Austrian election and Catalonian independence could cause longer-term Euro weakness

It may not be quite as prevalent as the UK’s political uncertainty at the moment, but there are a number of political events unfolding across the Eurozone that could cause some uncertainty and Euro weakness over the coming weeks. Over the weekend for example, Austria’s general election saw the victory of the Conservative Sebastien Kurz, who is known for his strong anti-EU stance. Furthermore, Kurz’s victory fell short of that needed for a majority and as such it is thought that he could enter talks for a coalition with the far-right and anti-immigration, Freedom party. Although there has been little volatility on Euro rates in the immediate aftermath, this election could cause further shock-waves for the Eurozone and may lead to tensions with Austria and Brussels in the coming months.

The Catalonian independence issue could also heap pressure on the Euro with an air of uncertainty still surrounding this sensitive topic. The situation is still unclear this week, with the Spanish government claiming that the head of Catalonia, Carles Puigdemont, has still yet to clarify whether or not he declared independence last week, following the letter that he wrote to Madrid on Monday that appeared to call for negotiations over the coming months. Again, there has been muted impact on the Euro so far, but as the uncertainty rumbles on this could weigh down on the Euro’s value longer term.

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.