Good morning. We've seen some volatility for both Pound/Euro and Pound/Dollar rates over the last 24 hours. The movements are due to events in the EU and USA however rather than any new data from the UK. Let's take a more detailed look at what has happened to each currency pair.
Pound/Euro drops to €1.12
GBP/EUR rates have been stuck in a range between €1.12 and €1.13 over the last month or so. Yesterday it was at the higher end of this range and there was speculation that it could push through the €1.13 mark. However, the latest European Central Bank (ECB) minutes proved rather bullish, and this as strengthened the single currency, making it more expensive to purchase and pulling the exchange rate lower.
The ECB minutes hinted that they could soon look to start winding up it's massive monetary stimulus programme. On the back of this the Euro has risen to it's highest in 3 years. The winding up of their stimulus programme is likely to happen if the EU economy continues to perform well. It's unlikely that they will start putting up interest rates for at least a year however, but yesterday's news shows that the Euro is likely to continue performing well throughout 2018.
Couple this with the spectre of Brexit that continues to loom over Sterling, and it would be reasonable to assume that significant downside risks remain for Pound/Euro rates, especially of there continues to be a lack of any progress with UK/EU negotiations.
If you need to buy or sell Euros and would to get a quote, or simply discuss which way the rate is moving, email me or send a free enquiry today.
Pound/Dollar rises to $1.36
This pair has moved in the opposite direction, rising close to the highest we've seen it since the EU referendum. Weak US factory inflation data was released yesterday, and this weakened the USD and made it cheaper to buy, helping GBP/USD rise. The Dollar and Euro often move inversely, so as the Euro strengthened due to the reasons I've outlined above, the USD weakened as investors sold Dollars for Euros, exacerbating the moves in both pairs.
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Labels: Currency, Euro, forecasts, Foreign Exchange, Free quote, GBP/EUR, GBP/USD, Pound falls against Euro, Predictions, Sterling