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GBP/EUR exchange rates the focus pairing for the day (Stephen Eakins)
GBP/EUR rates of exchange were the most volatile of the Euro currency pairings today. The rate fell below 1.39 after breaking through this previous resistance level for the first time in two months last week, as a result of poor news coming from the UK economy.
GDP growth figures for the UK economy were released today for the third quarter of 2015. Analysts were expecting a fall from the data recorded for the second quarter due to a severe slowdown in the UK construction sector. However, the fall was expected to be slight due to the beneficial effects of the Rugby World Cup in driving retail sales and the tourist industry.
However, their conservative estimates were blown out of the water, and the slowdown impacted growth forecasts twice as much as expected. GDP growth for the year is now down to 2.3%, compared to 3% last year, and Sterling weakened against most of its currency pairings as a result.
With GBP/EUR buying levels still near a two month high, the question is whether this slight fall is the start of a new trend?
Positive surveys released from the German economy yesterday morning suggests that this week will hold little chance of GBP/EUR rates climbing any further.
Despite the scandal over at Volkswagen, the survey showed that business conditions in Germany are still thriving throughout their other sectors largely thanks to the competitive nature of the Euro against more expensive currencies.
The scandal at Volkswagen in September caused GBP/EUR to rise more than three cents as Germany accounts for a significant portion of the European economy, and the Euro weakened as a result.
The next significant data release to affect GBP/EUR rates is unemployment data for the EU economy on Thursday. Should this show that the German economy was largely unaffected by the backlash (and the survey suggests this is certainly the case) then the Euro will likely regain that lost value as markets realize they overreacted the previous month.
It is hard to gauge to what level GBP/EUR may drop by the end of the week, but the main point to take away from the news is that there is little indication that GBP/EUR will be rising. Risk is now squarely at the feet of Euro buyers once more.
As such I strongly suggest that anyone with Euros to buy should contact me on [email protected] to discuss a strategy for your transfer to help maximise your Euro return. I can also supply a competitive quote and have never had a problem beating the rates offered elsewhere. Stephen Eakins 01494 787 478
Source: http://www.eurorateforecast.com/2015/10/27/gbpeur-exchange-rates-the-focus-pairing-for-the-day-stephen-eakins/
