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GBP/EUR exchange rates at 2 month high (Joshua Privett)
GBP/EUR exchange rates saw their largest positive movement across two days of trading since the announcement of the Greek election in Janaury. Rates moved up from the 1.35’s to the 1.39’s before settling down in the 1.38’s before the weekend began.
The driving force behind this incredibly favourable movement for Euro buyers was the comments made by Mario Draghi, the head of the European Central Bank, on Thursday.
He mentionned that the Quantitative Easing program, emergency large scale cash injections. will likely be extended beyond the September 2016 deadline in a bid to keep both spending and inflation up and the economy growing.
Furthermore, he mentionned possible rate cuts to deposit accounts from the already historic lows of 0.05% down to 0%. As this will not affect large-scale business, the movement from this news was marginal.
Where will GBP/EUR exchange rates move next?
No new policies were introduced at the meeting. As such rates moved more on the rumour of future policy changes rather than action. So Euro value will be in limbo until these rumours are confirmed or denied. The next meeting to confirm, delay or deny a rate cut won’t be until the ECB’s next meeting at the end of December. The decision on QE duration will not need to be taken until the middle of next year either.
So Euro rates should gradually tick down due to the net increase in Euro buyers with its sudden and dramatic cheapening. The result is an injection of Euro strength from an increase in demand. Rates have already corrected below 1.39 by the start of the weekend due to this effect.
As rates do not move over the weekend this effect has been halted until Monday.
I strongly recommend that anyone with a requirement to purchase Euros should contact me on [email protected] to discuss a strategy on how you can maximise your Euro return from this move in your favour. I can also supply a competitive quote on your transfer should you wish – I have never had a problem beating those offered elsewhere.
Even if your requirements are not until next year, these current rates can be pegged to avoid missing out and having to endure expensive moves against your favour. I feel compelled to remind readers that just 10 days ago GBP/EUR was trading more than 5 cents lower than we are currently seeing.
Source: http://www.eurorateforecast.com/2015/10/25/gbpeur-exchange-rates-at-2-month-high-joshua-privett/
