Why is buying Euros with pounds so expensive?! (Jonathan Watson)

GBPEUR rates have slipped over 10% since November. This means a €350,000 purchase is now over£30,000 more expensive. Flipped around this means if you are selling €350,000 Euros you are getting £30,000 more for your money. This massive difference in a matter of months is a result of sterling weakness and also Euro strength. We are now at a very important juncture on Euro rates as some recent policy decisions by the European Central Bank (ECB) have not had their desired impact and many of my clients buying Euros are asking the question when will GBPEUR rise again?

Last week was really the big event to work towards for my clients buying Euros with pounds but the ECB once again disappointed Euro buyers. This was because whilst they cut interest rates and also unveiled a big program of Quantitative Easing the Euro did not weaken anywhere near as much as hoped. This is really annoying for me having correctly predicted last Thursday as the right time to buy Euros (it was the best time to buy Euros in over a month), no sooner did it rise it fell. Mario Draghi announced that the measures taken were essentially the last line of measures and no further policy would be utilised. I do feel the markets have read into this too much and that the Euro will weaken.

Of course the pound is likely to remain under pressure because of the Referendum so if you are hanging on to buy Euros you will need to be brave! For more information please contact me Jonathan on [email protected]