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GBP/EUR rates held below 1.40 (Matthew Vassallo)
GBP/EUR is still the focus pairing on the markets due to the multiple forces at play on the pairing. With the 1.40 barrier within touching distance the question is whether this can be broken?
Yesterday produced was largely an uneventful day on the markets until about a 30 minute period surrounding 6pm, when the Federal Reserve Bank of America announced their decision on whether there would be a rise in their base interest rate.
While interest rates remained unchanged, the monetary policy report which was released alongside the decision was what caused such a stir in the markets. They hinted that a rate hike may occur in December.
News from the US has a heavy influence on Euro value, and by association GBP/EUR exchange rates. This is because the USD/EUR is the most heavily traded currency pair globally, so whenever the value of one rises or falls, the opposite effect is clearly visible in the other.
In this case confidence in the US economy translated into Dollar strength at the expense of the Euro, with significant capital flying into the US economy as investors hope for returns through better interest. The resulting Euro weakness catapulted GBP/EUR to the best rates available since August.
Data today has stopped the Euro sliding any further against Sterling. Inflation data came in very positively for Germany, nullifying some of the fears that the Eurozone is heading into negative inflation. Furthermore, some poor US GDP data stemmed the tide of capital flowing into the US Dollar. This is why GBP/EUR stopped short of 1.40 and have since been ticking downwards.
The artificial nature of the current rates has already been touched on by other authors on this website. GBP/EUR rates are up at their best levels since August, however little of this is to do with changes in the performance of UK or EU economies. As such these rates of exchange can be termed as ‘artificial’ and we tend to see a gradual decline in rates following this as their is little poor data out to keep buying levels this high.
Those with Euros to buy can feel free to contact me overnight while the rates are in limbo on [email protected] so that we can personally discuss a strategy for your transfer to help you maximise this unexpected but beneficial movement.
We can talk about the various options available to you through a currency brokerage which are not available through your high street bank, not just our vastly more competitive exchange rates. 01494 787 478
Source: http://www.poundsterlingforecast.com/2015/10/29/gbpeur-rates-held-below-1-40-matthew-vassallo/
