The key question for those clients holding EUR is whether or not the recent strength against the Pound is likely to continue over the coming months. Whilst I am not anticipating a sustained recovery for the Pound under current market conditions, further EUR strength is no guarantee.
The markets have now, to some extent, factored in the UK’s decision to exit the EU and this will be integrated into the current GBP/EUR exchange rates. Whilst the Pound is clearly fighting an uphill battle, UK Prime minster Theresa May has laid her cards on the table and therefore there is an argument to be made that the only way is up for Sterling?
Personally I still feel that whilst there is uncertainty surrounding how we will facilitate our Brexit and what trade deals will remain with the EU, the Pound will struggle to make a sustained move above 1.15 but with it currently finding protection around 1.10 and above, EUR sellers may have reached their optimum opportunity and should take advantage of the near 5 year highs.
Looking ahead and we have some key data releases to watch out for this week with tomorrow’s UK Unemployment rate (expected to remain unchanged at 4.9%), followed by Thursday’s Retail Sales figures, both of which are considered key release’s by investors and are likely to impact GBP/EUR rates.
However, it is likely to be Thursday’s European Central Bank (ECB) interest rate decision and subsequent monetary policy statement which will have the most influence on those clients holding the single currency. Whilst rates will likely be kept on hold at 0% it is ECB president Mario Draghi’s subsequent speech, which investors will be monitoring closely. Any indication of a future change in interest rates, or bullish or dovish statements could cause additional volatility on EUR exchange rates.
If you have an upcoming EUR currency requirement the current levels are a stark reminder as to how important it is to be kept up to speed with key market movements, ahead of any prospective currency exchange. The current levels may not be around for long as the currency markets can move aggressively and without prior warning and this is where a proactive broker can help you time your trades and maximise your currency transfers.
If you would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on email@example.com