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Are GBP/EUR Rates Heading Back Below 1.40? (Matthew Vassallo)
Sterling spiked towards a fresh 8 year high against the EUR earlier this week, with rates moving through 1.42 at the high. The Pounds’ recent momentum has shown no real signs of slowing but this trend will not last for ever, despite the aggressive move we’ve seen for GBP since the turn of the year. Market conditions can change rapidly and with the European Central Bank (ECB) having already laid out their plan for aggressive rounds of Quantitative Easing (QE) up until 2016, it will be interesting to note how the markets react to this moving forward. We need not forget that the UK economy was injected with aggressive rounds of monetary stimulus at a time when our economic recovery was slowing and it has the desired effect. Any similar outcome for the Eurozone is likely to see the EUR snap back and when it does, the current highs are likely to look very attractive.
In my opinion it does feel as if Sterling is riding the crest of a wave but with far more scope for improvement on the EUR side, when consider recent market history, then it could be playing a dangerous game assuming this ride will last indefinitely. I don’t anticipate any sustained run for the EUR under current market conditions but I do feel the EUR will gain support sooner rather than later and a move back below 1.40 is likely over the coming weeks.
It is a fairly quiet day in terms of economic data for the UK, although Bank of England (BoE) governor Mark Carney is speaking later today and any insight into the BoE’s stance and upcoming targets, are likely to cause additional volatility on GBP exchange rates.
We can offer various contract options, including forward contracts and limit orders, which are designed to maximise the market value and protect clients form future negative moves in the market.
If you have an upcoming currency requirement and 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 directly on [email protected]
Source: http://www.poundsterlingforecast.com/2015/03/12/are-gbpeur-rates-heading-back-below-1-40-matthew-vassallo/
