This Euro report will examine the factors that could affect exchange rates in the short term 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
GBP/EUR3.3%€7,000
QE tapering now a possibility by the end of the year

Will the ECB Taper QE this week?

The Euro has been a great benefactor of the growing global uncertainty, making considerable gains against the Pound and the USD as it now being used as a safe haven currency by investors. However, there were signs of weakness in the Eurozone yesterday, with retail sales figures and services data both growing at a slower pace than analysts expected. The question now is will the Euro’s strength continue and when will be the best time to buy Pounds?

Tomorrow could provide some answers to this question, with The European Central Bank’s Interest rate decision and Press Conference from Mario Draghi at 13.30. Draghi has hinted in recent months that there is the chance that the ECB could look announce tapering of their current Quantitative Easing program in the near future, which could strengthen the Euro. I personally think it is highly unlikely that we will see a raise in interest rates, with the futures market predicting that there won’t be a rate hike in the Eurozone until 2019. With the Euro being so strong against the Pound and Dollar at the moment, this is having an impact on their exports and therefore keeping inflation at low levels, meaning a rate hike could stifle the economy.

Draghi could attempt to weaken the Euro this week

I believe that Mario Draghi may attempt to weaken the Euro through his comments tomorrow, by claiming that the ECB’s monetary policy will remain accommodative for some time and warning over the implications of the Euro being too strong, and therefore we may see a good opportunity for anyone buying Euros to pounce on.

Looking further ahead, we are getting very close to the German general election at the end of this month, and as we get closer and closer we could see the Euro come under increased pressure, as we did with the Pound at the beginning of this year in the UK election. That being said, if Angela Merkel remains in power then we could see the Euro make some further inroads against the Pound.

With the Euro trading at close to an 8-year high against the Pound at the moment, I personally feel that this is an opportunity that's too good to miss for anyone selling Euros to purchase Pounds. With the market being incredibly volatile at the moment, I feel that if you see a spike in your favour, whether buying or selling Euros, it may be sensible to purchase at least a proportion of your currency to protect yourself from any adverse market movement.

Thank you for reading my Euro currency report, if you have any questions about an upcoming transfer 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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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.