Sterling/Euro has fallen further today, dropping into the mid €1.08’s. Again it’s a story of the Euro strengthening and becoming more expensive. We had higher than expected PMI figures from Germany and the EU this morning, and also a speech by ECB president Mario Draghi that gave the Euro a further boost. Later today we have EU confidence measures, which if better than expected would push GBP/EUR rates even lower.
Tomorrow we have UK GDP numbers and mortgage approvals, but these are unlikely to push the Pound higher. Yesterdays very good news about the UK borrowing figures did nothing to help Sterling, despite the fact the UK economy is performing very well. Concerns over Brexit and a resurgent Euro are combining to push rates lower and lower towards parity.
On Friday we have the annual symposium of Central bankers in the USA. If the ECB president Mario Draghi hints at ending EU stimulus this year, expect the Euro to gain even further and push GBP/EUR rates lower still.
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