Sterling/Euro rates remain supported due to weakness in the single currency, and despite a dip in the first part of this week, the pair remain around the €1.42 mark as the chart below shows. This is a great time to buy Euros, as even back in October the rate was as low as €1.33:
The reason for the exchange rate remaining high is the fact it’s looking more and more likely that the European Central Bank will ease monetary policy again at their meeting next week, and this is keeping the Euro weak, and GBP/EUR rates close to an 8 year high. However the rate has climbed to these levels several times this year before dropping back away, so I would be surprised to see this pair go much higher.
If you need to buy or sell Euros in the coming months, then you can fix the current rate of exchange for a date in the future by lodging 10% of the total you want to convert. In this way you’re protected against a drop in the rate, and it also allows you to budget effectively, for a property purchase overseas for example. To discuss this in more detail and get a quote for your exchange, click here to send me a free enquiry.
It’s thanksgiving in the USA today so data is thin on the ground. Of late the pair has been dropping steadily for the last 3 months. This is due to the fact that in stark contrast to Europe, rather than easing monetary policy they are actually predicted to raise interest rates next month, strengthening the Dollar and making it more expensive to purchase. The rate is hovering around the $1.50 mark and it may drop further still should investors become more and more confident about the US economy.
Due to the US Holiday it’s very quiet, so markets are likely to remain quite flat today. The only data of note is German Consumer Confidence at 12pm. Tomorrow is busier, with the latest Gross Domestic Product figures for the UK, and a Financial stability review for the EU, so while today may be relatively flat, volatility in GBP/EUR rates is likely to return tomorrow.
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