Pound/Euro hits 3 month high – The GBP/EUR rate has risen nicely today, from lows of €1.1140 to around €1.1250. For once, it is not Brexit that has driven the price movement. This time, it was weakness in the single currency that cause the move. As you can see from the chart below, the GBP/EUR rate spiked at 12:45pm:
What caused the spike?
Weakness in the Euro. At 12:45pm we had the latest European Central Bank (ECB) interest rate decision. I highlighted this earlier in the week as something that could move the GBP/EUR rate higher. This proved to be the case. They left its interest rate on hold as expected. What weakened the Euro was the announcement of a fresh round of Quantitative Easing (QE).
The €20bn per month of stimulus is a response to an economic slowdown in Europe. The ECB stated that the stimulus would go on as long as necessary while interest rates remain at record lows. Germany, the EU’s largest economy, is on the brink of recession. Inflation is low. With interest rates already at zero, there’s not much left to do other than QE.
With Brexit remaining the main mover of GBP/EUR rates, this spike could well be short lived. Any fresh fears of a No Deal exit in the next 6 weeks could easily pull rates lower. If you want to take advantage of this 3 month high, then contact us today to discuss how we can help. We offer the facility to freeze the current rate for up to 12 months, protecting against the rate dropping. This is particularly useful when purchasing property overseas.
Contact us today for a free quote or to discuss the market