There wasn't much to go on in terms of data this week. We had GDP figures from both the EU and UK, but the numbers were as expected and didn't really affect rates. We also had the latest interest rate decision and policy statement from the Bank of England, but again there were no surprises. No change was made, and only 1 member voted for a rate hike. I think it's highly unlikely rates will go up in the UK for at least a year, and that in turn is likely to keep the Pound from making much headway against other currencies including the Euros.
Will Pound/Euro rates get back to €1.40?
In my view they will eventually, but not in the short to medium term. Many clients are bemoaning the recent drop in rates, but actually if you take a step back and take a balanced view of GBP/EUR you realise it's still a very attractive time to buy Euros. The recent levels above €1.40 were the highest in over 8 years, the average over the last year is around €1.37 and we're still slightly above that. Go back to this time last year, and rates were down at €1.25 so while yes the rate has dipped off, there's no reason to believe it will return there any time soon.
The Eurozone are now combating their sluggish growth with robust stimulus measures that should eventually have the desired effect and strengthen the Euro again. The Pound is unlikely to make any significant gains until interest rates go up, which is probably a year off at best. So while it is of course impossible to predict which way rates will go, those that need to buy Euros may wish to consider their options while rates are still relatively good.
If you need to make a currency transfer in the next 6 months, and would like a quote or simply to discuss the options that are open to you, feel free to get in touch. I can explain the options you can consider and provide a quote for you to compare with your bank or existing broker. The rates I provide are up to 5% better in some cases, so you could save thousands of Pounds by sending me an enquiry.