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GBP/EUR rates up at 1.39! (Joshua Privett)
GBP/EUR is one of the few currencies that Sterling has gained against today, with markets still digesting the news that the European Central Bank may be extending their Quantitative Easing program beyond the September 2016 deadline, and were considering cuts isolated to current account rates in the Eurozone economy.
Yesterday GBP/EUR got a significant boost from inflated UK retails sales figures for September (a nice bump from the Rugby World Cup) announced in the morning, as well as the announcement mentioned above of a longer period of emergency stimulus being required for the Eurozone.
The news itself reduced long-term investment in the Euro as a result. Many investors had bought into the Euro recently due to its relative cheapness, and the promise of higher returns once QE was lifted at the back end of next year. This is now in doubt, and these investors moved out of the Euro, reducing its value with an the immediate and isolated mass sell-off. This has since extended into today’s traded with companies changing their long term plans involving Eurozone investment.
It must be noted that if a rate cut does occur, this will be confirmed at the end of December at the earliest because this is the next meeting of the European Central Bank.
So it seems Euro rates will largely be in limbo until confirmation of potential rate cut at the end of 2015.
With little data out until Tuesday next week, rates will likely fall away from these two month highs due to increased demand for the cheap Euro. This happened today with a fall half a cent away from the highs of midday.
As a warning, after Tuesday this fall may not be gradual when GDP data for the UK economy is released. The results from the previous two months have caused Sterling weakness due to repetitive contractions in GDP forecasts as a result of a flagging manufacturing and construction sector (not helping the current lack of houses…)
I strongly recommend that anyone with a Euro requirement before 2016 should contact me on [email protected] to discuss a strategy for your transfer to maximise your Euro return. I can also provide a competitive quote on your transfer should you wish and I have never had any issues beating the rates offered elsewhere. These current rates can also be pegged to avoid your budget continually changing over the coming months.
Source: http://www.poundsterlingforecast.com/2015/10/23/gbpeur-rates-up-at-1-39-joshua-privett/
