Inflation has very slightly risen in the Eurozone following a very difficult year in which the single bloc has been waging war on deflation, the threat of falling prices. Whilst growth is steady and unemployment had also recently fallen the ECB (European Central Bank) is keeping a close eye on the outcome of the Brexit on the Eurozone one of its biggest trading partners. The ECB have stated they are ready to act following the Minutes from their latest meeting and we could very easily see some further stimulus.
What this means is that their next meeting on the September 8th could prove interesting.
Clients buying Euros with pounds should not quite be breaking out the champagne yet however since GBPEUR rates remain at near 3 year lows and could fall further as more is known surrounding the impact of the Brexit vote on the UK. With some of our competitors offering buying Euros at less than 1 Euro for 1 GBP it is all the more important to be in examining all of your options in what remains a challenging time for Euro buyers. Whilst rates have clearly fallen for Euros buyers, rates have historically been much lower, it could get much worse and some form of strategy is important.
Key news this week for the Euro is the latest PMI (Purchasing Managers Index) due tomorrow at 09.00 UK time. This flash estimate of economic performance will be used by the ECB to help make any decisions next month. Next week there are Unemployment and Inflation releases on Wednesday. These will be two further key releases to help us determine the direction of the Euro’s next movements. I expect GBPEUR to remain in the lower ranges of its recent levels with more chance of it falling than rising as attention remains on the UK.
Euro sellers for pounds are still very much high and dry, further improvements cannot be ruled out but equally it would be a shame to miss out on these rates should the Euro unexpectedly weaken. The Italian banking and Greek debt crisis are still running in the background and could flare up at any time. Finally starting Thursday is the Jackson Hole symposium a meeting of central bankers in the United States. There are often speeches on monetary policy that have been known to move exchange rates so be sure to register any interest with our helpful team should we see any unexpected movements that might be important to you.
A number of economic and political uncertainty for the remainder of the year, exchange rates will remain volatile making it harder to predict. Thats where our brokers can help, call our team today on 01494 725 353.
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