Friday 15th November 2013
Pound/Euro rates continue to be pulled in both directions, however the levels remain just under €1.20 which is around the best it’s been since January. So what has been happening since my last post that has caused the rate to fluctuate?
Well in my last post I showed that the Unemployment and Bank of England data releases on Wednesday had caused the Pound to strengthen and pushed rates higher. To illustrate how volatile the rates are at the moment, these gains were short lived and on Thursday morning we saw the Pound fall back away due to lower than expected UK Retail Sales.
This slump itself was short lived however, as also yesterday we saw some disappointing EU growth figures that weakened the Euro and pushed the GBP/EUR rate back up again.
Eurozone growth slows, pushing GBP/EUR higher
Yesterday official figures showed that the Eurozone economy grew by just 0.1% in the July-to-September period, down from 0.3% growth in the previous quarter. The European Central Bank (ECB) last week cut its benchmark interest rate to 0.25% in an attempt to give some impetus to the fragile recovery.
The worse than expected numbers caused the Euro to weaken, become cheaper to purchase, and therefore the Pound/Euro rate rose.
This week has really shown how susceptible exchange rates are to economic data releases, and the immediate effect these releases can have on the price of a foreign currency.
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What is likely to happen to exchange rates in the coming weeks?
This will depend on the next round of economic numbers. On Monday I will post a full review of all of next week’s data releases, to keep you informed on what is happening and how the data could affect exchange rates.
Over the last week I have correctly predicted that the EU inflation numbers, Bank of England report and UK Retail Sales would be the main movers of currency rates, and that is exactly what we saw.
Of course nobody can predict exchange rate movements or forecast which way a currency will go, however what I can do is explain the factors that will move the exchange rate you’re interested in, and also provide you with the options you can consider, so that you can make an informed choice on what to do and when to do it.
In addition the market knowledge I have, the exchange rates I can source are commercial levels that are usually much better than you can achieve elsewhere. So if you need to buy or sell currency, and getting the best exchange rate is something that interests you, then send me a free enquiry today.
It costs nothing to make an enquiry, carries no obligation, and you may well be very surprised how much you could save.
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I look forward to hearing from you. Have a great weekend.