Tuesday 2nd June 2015
This morning we have seen GBP/EUR rates plummet, with the currency pair falling by 2.5 cents from €1.3950 this morning, to €1.37 at the time of writing:
What has caused the drop?
The reason for the drop was a strengthening Euro. Earlier today we saw the latest EU inflation numbers, and these showed that inflation in the Eurozone turned positive in May after five months of negativity, and this revives hopes of an economic recovery in Europe. Earlier this year, the European Central bank embarked on a huge €1.1 trillion Quantitative Easing, or money printing programme in an attempt to stimulate the Eurozone economy, and the figures today suggest that this is working. That is why the Euro gained strength and has become more expensive to buy.
Meanwhile in Greece…
Also today there may have been developments in Greece. Their Prime Minister Alexis Tsipras has said that he has issued “a realistic proposal” to its international creditors in an attempt to secure a deal over its debts. “We have submitted a realistic plan for Greece to exit the crisis,” he said. The problem is, we don’t know what this plan actually entails! International Monetary Fund chief Christine Lagarde and ECB president Mario Draghi are at a meeting between German Chancellor Angela Merkel and France’s Francois Hollande discussing the issue at the moment, and their attendance shows how serious these talks are.
If they really have made a plan that might be accepted, expect the Euro to gain further strength in the coming days pushing rates even lower. If however his plans come to nothing, then the uncertainty about what will happen with Greece will remain, and this could weaken the Euro and cause rates to recover
Worried about Pound/Euro exchange rates?
If you need to convert Pounds to Euros, or Euros back to Pounds at the best rates, then you can send me an enquiry to have a free consultation on exchange rates. I can discuss your particular requirements, explain what could move the exchange rate, and explain various options you can consider as to when to fix an exchange rate. I can also provide you a quote for your exchange that could be up to 5% better than available at your bank, which could save you thousands of pounds on a large transfer.