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GBP/EUR exchange rates volatile around the 1.40 mark (Joshua Privett)
GBP/EUR rates of exchange have been swinging wildly above and below 1.40 today as my article below from yesterday morning said to expect.
A brief timeline of the morning saw rates drop from 1.404 to 1.396 as Euro buyers rushed to take advantage of the recent cheapness of the Euro, which in turn drove up the value of the single currency through increased demand.
Strong UK service data for the month of October released this morning then saw GBP/EUR rocket to 1.406 as confidence in Sterling rose. However, similarly strong data for the Eurozone came out for their own financial services sector, caused the GBP/EUR rally to halt and then correct back down to just above 1.401 as I write this article.
Overall there is a net-loss on GBP/EUR rates so far today. This is unsurprising given the massive movements in favour of Euro buyers last week.
This was mainly down to events across the Atlantic which my post below notes. The Federal Reserve Bank of America hinted in the monetary policy statement released on Wednesday that interest rates may rise in the US economy as early as December.
Regular readers of this website will have heard before that because USD/EUR is the most heavily traded currency pairing in the world, any change in the value of one of these currencies generally causes the opposite effect in the other. In this case a huge amount of capital flowed out of the Euro and into the US Dollar in the hope of a higher return on investment should interest rates rise in December. The Euro lost value against its other pairings like GBP/EUR due to this capital outflow.
As these GBP/EUR rates are not based on any changes in the UK or EU economic performance -both of which are currently doing better than expected as the data above shows- these rates are largely artificial and unlikely to be a permanent feature on the currency markets.
Rates should gradually lose value as Euro buyers scramble to get the best deal on GBP/EUR rates which raises the value of the Euro through increased demand.
With the Bank of England interest rate decision on Thursday, which has consistently caused Sterling weakness over the past three months, anyone with Euros to buy should be looking to move sooner rather than later.
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 on your transfer to help you buy at the high of the market, and receive a competitive quote to maximize the Euro figure your Sterling can achieve.
Even if your requirements are not until next year, these current highs can be pegged to avoid losing out on the gains of over 7 cents for GBP/EUR rates during October alone. [email protected]
Source: http://www.poundsterlingforecast.com/2015/11/02/gbpeur-exchange-rates-volatile-around-the-1-40-mark-joshua-privett/
