In this Euro forecast, we’ll examine how the Euro has weakened in the last 24 hours, partly as a result of a shift in EUR/USD exchange rates, which has seen funds moved to the US dollar from the Euro. On the interbank rate, the US dollar has appreciated against the Euro in yesterday’s trading, from 1.0947 to 1.0885.
This shift can also be linked to some of the movement we have seen in GBP/EUR rates, with the Euro’s losses against the US dollar being reflected in losses against the Pound too. GBP/EUR rates have tested the interbank rate of 1.13 today, testing some of the better rates we saw the week before last, when GBP/EUR hit 1.1384. Considering the lows of 1.0640 hit on August 10th of this year, this is a most welcome improvement for Euro buyers. But how will Brexit affect GBP/EUR levels ahead?
Pound to Euro exchange rates have been very volatile in 2019, ranging from the highs of 1.18 on the interbank rate, to the lows of around 1.06 mentioned above. Will GBP/EUR make a further recovery ahead? Much of the uncertainty for the Pound stems from Brexit.
For the Euro, there have been increased concerns regarding the outlook on the Eurozone economy, and also whether the ECB (European Central Bank) will need to alter their monetary policy. Recently, the ECB cut interest rates and restarted their QE (Quantitative Easing) policy, to stimulate growth in the face of a slowing global economy.
Should I wait to buy Euros?
For the Eurozone ahead, we also have the Spanish general election in November, plus the conclusion of the Italian political situation. There are no guarantees ahead, but the Euro has some challenges ahead on the economic calendar, as political uncertainty is not a concept linked just to the UK and the British Pound.
Euro rates will face some added challenges in October, with the EU Summit on the 17th and 18th likely to attract attention by markets. The UK is a key part of the European Union, and its potential detachment will raise lots of questions, which the currency market will have to anticipate and reflect, that being what exchange rates are i.e. a reflection of investors’ attitudes and thoughts, on the unfolding events.
Thank you for reading and I would greatly welcome further discussion on the finer points of these unfolding events, and how it may influence your currency transactions. You can contact me, Jonathan Watson, directly at firstname.lastname@example.org.