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GBP/EUR exchange rates to gradually decline before steep fall on Thursday (Steve Eakins)
The exchange rate for GBP/EUR was incredibly volatile to start the month off yesterday, with companies shifting capital to manage their assets for the next month causing violent shifts in the markets. However, as expected, there was a marginal net loss for the Euro. As I type this the rate is currently just above 1.40.
Today we have some construction sector data which is set to come in quite positively to match the stronger than expected manufacturing data released yesterday morning. Sterling could receive a short-term boost as a result.
However, market forces currently in play are causing pressure on GBP/EUR rates, and gains for Sterling from renewed confidence in UK manufacturing evaporated quickly yesterday afternoon. 1.406 was the high but 1.39 was back on the markets by lunch.
There are two reasons for this. Firstly, these current rates of exchange were made so favourable so suddenly that the rush of Euro buyers to take advantage of the current levels are driving up the value of the Euro through increased demand.
Those who have been watching the markets regularly will remember that the rates of exchange were as low as 1.33 during October, the worst time to buy Euros since February. This website has covered how much the artificial collapse in Euro value in the final week of October following hints of an interest rate hike in December for the US economy has helped Euro buyers.
Secondly, data over the coming weeks is unlikely to support the current buying levels, as comparative UK and EU economic performance do not justify such high GBP/EUR rates of exchange.
On Thursday the UK interest rate decision and monetary policy statement will be released. Month on month since August we have seen a serious snap-back in Sterling value following indications that an interest rate hike in the UK economy will suffer continuous delays.
Our current levels of inflation are the worst since records began, much worse than the positive data posted by the Eurozone last week. This is why, for the fourth month in a row, delays are expected once more as there is little change in the UK landscape. Sudden Sterling weakness will not surprise me, resulting in a slide on GBP/EUR.
I strongly suggest that anyone with Euros to buy over the next few months should contact me on 01494 787 478 and ask the reception for Steve to discuss a strategy on your transfer in order to maximize your Euro return by buying at an opportune time. We can also discuss a competitive quote for your transfer, and I have never had an issue beating the rates offered elsewhere.
Furthermore, if you have Euros to buy later in the year or even in early 2016, the 7 cent improvements for GBP/EUR in October do not have to be wasted. You can peg these current rates of exchange for up to 12 months to avoid volatility causing your transfer to become more expensive. [email protected]
Source: http://www.eurorateforecast.com/2015/11/03/gbpeur-exchange-rates-to-gradually-fall-before-spike-on-thursday-stephen-eakins/
