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Where Next for EUR Exchange Rates? (Matthew Vassallo)
The EUR has had another volatile start to the trading week, with early gains quickly eliminated during yesterday’s trading. The EUR received a boost last week following the announcement that a new deal was in place between Greece and its creditors and at the high broke back below 1.40 against the Pound. However, yesterday there was a host of UK data releases and with inflation figures coming above expectation the gains made by the EUR were quickly eliminated, with GBP/EUR moving back above 1.42 at today’s high.
To me this is another example of how little confidence there is in the single currency amongst investors and is a warning to any clients looking to sell EUR, who were hoping for a sustained improvement off the back of the Greek deal. Whilst I do accept that Sterling will struggle to break through the highs we saw a few weeks ago now that a deal is in place, longer-term I fear the same problems will continue to arise and this will put further pressure on the EUR over the coming months.
We also need to consider the possibility that the Bank of England (BoE) will raise interest rates sooner than expected and again this will only enhance the UK’s credentials in terms of its economic health and this is likely to benefit Sterling further.
For EUR sellers the hope is that the Bank of England will try to control Sterling’s value for fear of alienating our trade partners, and under current conditions this is the only tangible reason I can see, that is likely to stop the Pound’s value soaring further.
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]
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Source: http://www.eurorateforecast.com/2015/08/19/where-next-for-eur-exchange-rates-matthew-vassallo-6/
