GBP/EUR drops to €1.3850 as Euro gains strength. GBP/USD rises.

Wednesday 29th April 2014 
In my last post a week ago, I talked about the Sterling/Euro rate breaking through the €1.40 level. As I predicted, this spike to a near 8 year high was short lived, and today the rate has fallen from 1.40 down to €1.3850 as you can see from the chart below: 

Why has the Pound/Euro rate fallen? 

Simply put, the Eurozone economy is starting to perform well. Euro and German bond yields rose to their highest level in several weeks today, after data showed bank lending has stopped falling, and consumer inflation expectations have risen. As the European economist at RBC Capital Market has said, “Happier days are on the cards”. He added that “The continued improvement in credit supply conditions bodes well for the sustainability of the euro area recovery overall.” 

So it seems that the latest figures show that the European Central Bank’s (ECB) Quantitative Easing programme is starting to have a good effect, much as stimulus programmes in the UK and USA have done. Also, there has been positive news on Greece. They are expected to present legislation to lenders to show it is serious in making efforts to repay it’s debts, and as a result the Euro has gained strength and become more expensive to buy. 

If you need to buy or sell Euros, would like a quote or to discuss whether the Pound/Euro rate is likely to go up or down in the coming weeks or months, send me a free enquiry today by clicking here. 

Pound/Dollar rates rise to nearly $1.55 

In contrast to the GBP/EUR rate dropping, GBP/USD has risen nicely in the last few weeks, rising from $1.46 to $1.55: 

This is because today figures showed that the US Economy is growing much slower than expected. In turn this means that interest rates aren’t likely to rise as quickly as previously thought, and as a result the US Dollar has lost value and become more expensive to buy. 

Which way will Pound/Euro and Pound/Dollar exchange rates move next? 

While it’s impossible to predict, I think that now the EU economy is looking more robust, focus will turn to the UK election, so we could well see Pound /Euro rates continue to fall. That assumes of course that Greece makes its upcoming €1bn debt repayments. If they don’t, a rise back to €1.40 could be on the cards. 

Pound/Dollar rates on the other hand are likely to keep dropping. I think this spike above $1.50 will be short lived and expect the rate to be back down in the €1.40’s before long. 

Getting the best exchange rates 

If you need to convert £5k+ from one currency to another, then it would be prudent to get in touch with me for a quotation. I can source exceptional rates of exchange for any major currency conversion on a bank to bank basis. If you would like a quote or to find out more about the service I offer, click below to send me a free no obligation enquiry. I regret I cannot help with cash or holiday funds, and can only assist those looking to have currency wired to a bank account. 

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