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GBP/EUR exchange rates show net-loss to start the week (Joshua Privett)
GBP/EUR rates of exchange have had a roller-coaster start to the week after seriously strong gains against the Euro recorded for Sterling after starting October at the worst levels to buy since February.
As my article below notes it was always going to be difficult for GBP/EUR to remain above 1.40 as these current rates of exchange are artificial and the Euro is currently undervalued on the markets.
Regular readers of my reports will already know that the value of the Euro is heavily influenced by changes in the value of the US Dollar. As USD/EUR is by far the most traded currency pairing in the world, any change in value for one of the two results in the opposite effect occurring in the other.
In this case, last weeks hints that a potential rate hike for the US, the first such in a major economy since the 2007/8 financial crisis, could occur as early as December caused confidence in the US Dollar to rise.
This resulted in huge amounts of capital to flow out of the Euro and into the US Dollar in hope of greater returns should an interest rate hike occur in September. The subsequent weakness in the Euro from this reduced demand for the single currency is why GBP/EUR rates of exchange broke the 1.40 mark last week.
These beneficial movements for Euro buyers are nothing to do with changes in the performance of the UK or Eurozone economies. As such they are unlikely to be permanent features on the currency markets. There is simply no data poor enough on the Eurozone economy to justify such cheap rates.
This was proved today when financial services data for the EU came in much better than expected, causing a correction from 1.406 back to the high 1.39’s.
This gradual decline on GBP/EUR rates will likely become significantly steeper on Thursday. The Bank of England interest rate decision and monetary policy statement set to cause Sterling weakness for the fourth consecutive month, as our timeline for raising interest rates gets pushed back once more.
I strongly recommend that anyone with Euros to buy in the coming months should contact me on 01494 787 478 and ask the reception for Joshua to discuss a strategy for your transfer and receive a free quote on your exchange in order to maximize your Euro return.
Even if your requirements are not until next year, these current rates of exchange can be pegged to avoid missing out on the 7 cent movement in your favour during October alone. [email protected]
Source: http://www.eurorateforecast.com/2015/11/02/gbpeur-exchange-rates-show-net-loss-to-start-the-week-joshua-privett/
