| Online: | |
| Visits: | |
| Stories: |
| Story Views | |
| Now: | |
| Last Hour: | |
| Last 24 Hours: | |
| Total: | |
GBP/EUR hit 1.38 briefly but Euro buyers receive respite with positive US Data (Joshua Privett)
Sterling hasn’t stopped its slide in value since yesterday afternoon. GBP/EUR rates started the day on Thursday at 1.42, and have just recently hit 1.38. Luckily for Euro buyers, some news in the US this afternoon managed to artificially weaken the Euro in the short-term.
The reason for Sterling’s plummeting value was the news released yesterday from Mark Carney, the Governor of the Bank of England, which almost categorically took an interest rate rise in the UK economy off the table for the entirety of 2016.
The impact on Sterling immediately following the announcement was incredibly sharp negative movements, and more is yet to come. Companies and individual investors will now be looking elsewhere for short-term returns on their capital – most likely the US economy and US Dollar, who are poised the raise their base interest rate next month.
Companies will be looking to complete these changes by the end of the month, as they aim to have fully implemented their new business plans ahead of the December period when corporate activity begins to wind down. So the movements on GBP/EUR this month could be fiercely negative, and sustained.
Last month, similar news about delays in the interest rate hike caused rates to drop down to the worst buying levels for Euros since February this year.
Luckily for Euro buyers two short term bumps have meant that GBP/EUR rates are 3 and half cents higher than they currently have a right to be.
The Volkswagen scandal expanding to all of their petrol powered cars on Wednesday wiped off a further €3bn from the European stock-market, which caused the Euro to weaken by 2 cents on the news before Thursday’s fall in Sterling corrected this.
Today also had a further bump from positive news out of the USA. Almost 100,000 more jobs were added to the US economy last month that expected. With USD/EUR being the most traded currency pairing in the world, the general rule of thumb is that strength for one currency causes weakness in the other. In this case the Euro weakened by about a cent in the space of 10 seconds with such staggerlingly positive news for the US economy.
A few planets have aligned to keep the mid-market rate above 1.40, when by all rights the news from Thursday could have had rates down as low as 1.36. As the above details, the trend is still very much GBP/EUR negative for the rest of 2015.
I strongly suggest that anyone looking to buy Euros in the coming months should contact on [email protected] to discuss how to secure these high levels of exchange ahead of any expected drops. These buying levels can be fixed for the coming months to avoid the expected falls throughout September and I have never had an issue beating the rates of exchange offered elsewhere.
Those selling Euros can do the same, and we can discuss how to ride this current movement in your favour in the timeline you have to complete your transfer.
Source: http://www.eurorateforecast.com/2015/11/06/gbpeur-hit-1-38-briefly-but-euro-buyers-receive-respite-with-positive-us-data-joshua-privett/
