Euro Rate Forecast

Currency experts forecast on the Euro

When will the Euro weaken?

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Euro strength seems likely to persist but cracks may easily emerge

A key question for any client looking to buy Euros is when will the Euro weaken? Troubling for any client buying Euros is economic might of the Eurozone economy which has been growing and really appears to have turned a major corner after many distressing years with concerns over debt.

With the US Federal Reserve and the Bank of England on course to be raising their interest rates further, and the European Central Bank, ECB currently stuck at negative rates, the prospect for a weaker Euro against these currencies seems a matter of when, not if. A further factor toweaken the Euro would also be the prospect of debt problems resurfacing. Italy and Greece are still majorly indebted which could easily trigger a loss of confidence in the single currency in the future.

When will Eurozone debt issues resurface?

This is a very difficult call, the market is a strange beast. Sometimes, it all comes down to perception and sentiments. With Mario Draghi, President of the ECB suggesting he will ‘do whatever it takes’ to save the Euro, there remains an important backstop to further future weakness. Nevertheless these issues could easily resurface at any time, Greece’s debt is still 180% of GDP, Italian debt is 132% of GDP. As a guide UK debt is 88% of GDP and German debt 61%. Italy also owes the ECB €500 bn as part of various loans, these are not small numbers!

At present the Euro is performing well against its counterparts compared to some historical levels. GBPEUR had spent most of 2000-2007 in the 1.40’s before the financial crisis took us to 1.03 for the beginning of 2009. The average thereafter has been just over 1.20 with lows of 1.16 rising to highs of 1.44 from 2013 to 2016.

The Euro is buoyant against most currencies presenting a very good historical time to be selling for another currency. There is not a huge amount of economic data this week from the Euro but some key UK and US releases which could impact GBPEUR levels.

If you need to buy or sell Euros and wish to discuss any strategy to maximise a deal further, please contact me Jonny on jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from you.

Jonathan Watson

Strong UK employment figures fail to hide Brexit concerns, where to next for GBP/EUR?

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The Pound is coming under increasing pressure at the moment, owing to both poor economic data and concerns surrounding the Brexit and how it’s unfolding.

Despite the UK jobs market being very healthy, and you would have to go back as far as the mid-1970’s to see a jobs market this healthy as the number of unemployed sits at just 4.2%, the Pound is still coming under pressure owing to other factors impacting its value.

This news has done little to boost sentiment surrounding the Pound as wage growth is coming under pressure, inflation is falling and the UK Prime Minister, Theresa May is struggling to push through her Brexit plan.

There is a clear split in the Brexit camp and last night, May narrowly escaped defeat in the House of Commons that many think would have led to a vote of no confidence. Should her position come under pressure I think we expect to see the Pound fall further, as it’s now late in the process and the UK is running out of time to agree the plan amongst its own government before even putting forward the plans to the EU.

Data is light for the remainder of the week, so I expect the GBP/EUR rate to be driven by Brexit related news and also whether or not the expected rate hike from the Bank of England in August.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Joseph W

Euro strengthens as migrant crisis agreement is made at EU Summit

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The Euro has strengthened across the board of major currency pairs today, as in the early hours of this morning an agreement has been made between EU leaders regarding the migrant crisis and how to best deal with the issue.

Talks continued for 10-hours and news of the agreement has pushed the Euro rate higher. The currency is trading at a 3-month high against the Pound making it a good time to convert Euros into Pounds.

The agreement ensures that ‘voluntary centers’ will be set up in Europe and these will be used to determine whether the refugee’s are genuine or not. The issue was a great matter of contention and has threatened to break up the EU with Italy threatening to veto the EU’s agreements if a reasonable solution wasn’t put forward. The Italian Prime Minister has since stated that ‘Italy no longer stands alone’ and the news is also good for Angela Merkel, the German Chancellor as there were concerns of a split in her camp regarding the matter.

Moving forward this topic is likely to continue influence the GBP/EUR rate, and today at the EU Summit Brexit is expected to be the main topic so there could be further updates from the Summit that influence exchange rates. If you would like to be kept updated in the event of a major move for the pair, do feel free to register your interest with me.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Joseph W

Will the Bank of England drop any hints today, and how could that impact GBP/EUR exchange rates?

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Despite the UK Government winning a key vote on the Brexit bill yesterday in the House of Commons, the GBP/EUR rate has remained relatively flat with the pair currently trading in the 1.13’s.

Theresa May has avoided a Tory rebellion that threatened to cause further stalls to the Brexit, and now that this hurdle has been passed I think May will be in a better position moving forward.

Today at lunchtime there will be a Bank of England meeting and although no interest rate hike is expected, I think there’s scope for forward guidance and this could result in movement for GBP exchange rates.

So far two members of the BoE, Ian McCafferty and Michael Saunders have both voted in favour of hiking rates and many had expected to see it happen in May. Weak economic data put those plans on hold for now but I expect to see the Pound to Euro rate climb back into the 1.15’s once expectations of another rate hike materialise.

Outside of hours today, BoE governor Mark Carney will be speaking again at the annual Mansion House dinner and so will Philip Hammond, the chancellor of the exchequer. If you wish to be updated in the event of a major move for the pair, do feel free to register your interest with me.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Joseph W

Euro boosted after ECB member drops hint of major announcement next week

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The Euro gained against the Pound yesterday, after the markets viewed comments made from an ECB member yesterday positively.

At the moment all eyes are on next weeks European Central Bank (ECB) meeting which takes place next Thursday, and yesterday at a speech in Berlin an ECB member hinted at a major announcement regarding the ECB’s asset purchasing programme next week.

Peter Praet suggested that there are signals showing convergence of inflation towards the 2% target have improved and the ‘ending for APP (Asset Purchase Programme) will be up for discussion next week’. With some economists predicting that the APP will come to a close this year the markets reacted to the comments yesterday and the Euro strengthened.

The Euro had already received some positive news this week when it emerged that the new Italian government formed by the coalition of Lega and the 5-star movement don’t plan on withdrawing Italy from using the Euro. There are still concerns surrounding the new government as their plans to cull immigration and increase public spending. These concerns may stop the ECB from making any immediate decisions to cut back on the current APP but we’ll find out for certain next Thursday.

Later this morning the EU’s GDP figures will be released at 10am UK time. The expectation is for 2.5% year on year which is unchanged from the previous update, so we’ll see how the figure impacts the markets when its released this morning.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Joseph W

Euro strength on the horizon?

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Next week the ECB will give forward guidance in regards to the Quantitative easing program according to ECB members Praet, Hansson and Knot. As reported in many articles last year, European economic data impressed and speculation at the beginning of the year rose in regards to the QE program would be removed by the end of the year.

For people that are not familiar with quantitative easing (also known as QE), QE is essentially  the introduction of new money into an economy. If the QE program comes to an end you would expect the euro to strengthen as there are less euros in circulation therefore they are more valuable.

For people that are selling euros, there is a strong argument to suggest that next Thursday could provide a fantastic opportunity. 

However its not all positive news for euro exchange rates. Now that Five star and Lega have been sworn in they plan to make tax cuts and increase spending which is not supported by the EU. The Italians have a debt problem as it is, if this increases I expect the Italians will be asking for debt relief at every opportunity. This story has the potential to have a major influence on exchange rates therefore regular updates are needed if you are buying or selling euros in the future.

If you are buying or selling euros this week, month or year and I have not covered the currency pair you are trading, I would recommend emailing me with the currency pair (EURUSD, EURGBP, EURAUD) and the reason for the transfer (company goods, property purchase) and I will response with my forecast and the options available to you drl@currencies.co.uk. Alternatively if you would like to discuss your requirements over the phone call 01494-787478 and ask to be put through to Dayle Littlejohn.

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you a few minutes and in the past I have saved clients thousands! **

Dayle Littlejohn

Should I buy euros with pounds now?

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With GBPEUR exchange rates performing relatively well in comparison to last year, there is a strong argument to purchase euros now. At present the Euro is under pressure due to Italian politics which is making euro purchases cheaper. Reports are suggesting that anther snap election could take place as early as the end of the summer. The concern for the euro is that the Eurosceptic parties could gain further momentum and therefore try to remove Italy from the euro.

Leader of the League Matteo Salvini, has gone one step further and stated it won’t be an election and in fact another referendum, insinuating if they gain more power and form a government they aim to pull Italy away from Europe.

However we are now one month away from the EU summit and both the UK and EU have made it clear progression needs to be made in regards to Brexit. The main talking point is the customs union and Irish border. UK Prime Minister Theresa May is stuck between a rock and a hard place as she doesn’t want to break up the UK by allowing Northern Ireland to remain part of the customs union but at the same time she doesn’t want a hard border in Ireland. The problem is that she needs to pick one or the other.

Last week Irish Prime Minister Leo Varadker warned the UK and suggested “without the Irish border resolved there can be no withdrawal agreement”. A no deal I don’t believe is an option for Mrs May and in my opinion we would see a snap election before this happened. 

For clients that are buying an asset abroad short term, I can’t see how the June summit is going to help the pounds value, therefore I would look to purchase upfront as soon as possible.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Dayle Littlejohn) on drl@currencies.co.uk and I will endeavor to get back to you as soon as I can.

Dayle Littlejohn

Pound to Euro rate trades sideways as data disappoints

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The Pound to Euro exchange rate has remained flat during trading today, although some may have expected to see the Pound fall after the disappointing data released this morning.

There has been a drop in the rate of inflation in the UK unexpectedly, and although this is a good thing in regards to the cost of living declining, it’s not necessarily a good thing for the Pounds value in the current climate.

There had been hopes of an interest rate hike by the Bank of England earlier this month, but weak data mostly owing to the poor weather earlier in the year as well as a slowdown in the UK economy put a halt to this. There were still hopes of a rate hike later in the year but this morning’s data has lessened the chances of this happening which resulted in a drop of over half a cent immediately for the GBP/EUR rate.

With GBP/EUR sitting on 1.14 at the time of writing, I think there could be movement for the pair tomorrow when Retail Sales figures will be released.

With the poor weather, the ‘Beast from the East’ negatively impacting the sector earlier in the year along with the changing high street and the move towards online retail, I think this figure will be followed closely. You can register your interest with me if you wish to be updated in the event of a spike for the pair.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

 

Joseph W

Euro weakens following Italian Coalition (Daniel Johnson)

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Italian Spendthrift Government does not bode well for the Euro

The markets are clearly concerned about the Italian collation of League and the 5 star movement . The Italian stock market and the Euro has suffered. The next Italian Prime Minister is expected to be announced as Giuseppe Conte, he is predicted to make significant cuts in taxes, provide additional welfare and also wishes to roll back pension reforms.

A new government that has the intention to  spend large sums of money does not bode well for the Eurozone. Italy is the bloc’s third largest economy, but is also the most indebted next to Greece.

Germany are currently trying to rid themselves of all public debt in an attempt to avoid joining  a debt consolidation pool for the entire Eurozone. As Germany is the engine room of the EU they would be expected to contribute more to debt repayment , essentially paying off less affluent countries’ debt. The new coalition government in Italy would clearly make the debt pool far more substantial.

Euro sellers should consider moving at current levels considering the present outlook. If we look at Sterling against the majority of major currencies there has been substantial falls due to poor data and the poor interest rate  forecast.  GBP/AUD down by nearly 10 cents, GBP/USD also down by nearly 10 cents. Against the Euro however GBP/EUR moved into the 1.14s. Demonstrating the advance is clearly Euro weakness apposed to any positive data from the UK.

EUR Buyers – If you have to move short term move at 1.1430 +

EUR Sellers – Consider moving at current levels.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

Daniel Johnson

Pound to Euro breaks 1.14 and holds its ground, what factors are likely to influence the rate moving forward?

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It’s been a relatively good day for the Pound against the Euro, with the pair consolidating above the 1.14 mark after struggling to breach it a few times recently.

The Pound hasn’t performed well across the board today, so I think it’s fair to say that the movement is a result of Euro weakness. The Euro is coming under pressure due to political instability in Italy. At the same time central banks are either beginning to hike rates or discussing it at least, whereas there isn’t likely to be a rate hike from the European Central Bank (ECB) this year based on their comments which is another reason for the Euro falling out of fashion.

To put the Euro weakness into perspective, against the US Dollar the currency has lost almost 4.5% in just the past month.

Although the interest rate hike from the Bank of England didn’t go ahead last week, there are still economists predicting a rate hike later this year which is offering the Pound support.

In regards to the rate I think that there is support at 1.13 in the current market, but it’s going to take some special news to push the pair into new 2018 territory.

There isn’t much economic data out for the remainder of the week that could impact rates, which gives any of our readers planning their transfer next week plenty of time to plan it.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Joseph W

Modest gains for the Pound today despite some weak data, will tomorrow bring further movement? (Joseph Wright)

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Sterling has made some modest gains against the Euro during today’s trading session, despite some disappointing economic data being released this morning.

Retail Sales within the UK dropped off during April by -3.1%, which is the sharpest drop seen in over two decades. I think that there hasn’t been a massive move for the Pound because markets are generally attributing the drop to the poor weather and also the high inflation levels at the moment.

If the poor economic data continues though I am expecting to see the Pound drop-off throughout the year. At the moment we’re seeing some very poor data with UK economic output hitting a 5-year low recently, and Manufacturing PMI hitting a 17-month low.

Markets haven’t reacted much as I believe the poor weather is being blamed on the weak data, but once there isn’t a viable ‘fall guy’ I think there will be a market reaction.

Tomorrow could be busy for GBP exchange rates as there is a Bank of England meeting around mid-day. Previously there were expectations of a rate hike tomorrow. This boosted the Pound dramatically when the talk of it hit the headlines although since then the raft of poor data has softened the Pound’s value.

I think that those with an upcoming currency requirement involving the GBP/EUR pair should be aware of tomorrow’s main event, and if you would like to discuss it with me do feel free to get in touch.

If you have a large currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

Joseph W

Sterling suffers against the Euro (Daniel Johnson)

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Bank of England Rate hike now off the cards

The Pound is proving very fragile at present and is suffering against the Euro. For eleven months GBP/EUR has failed to move above 1.16. We have seen a host of poor data from the UK, retail sales , inflation and GDP were all shocking. GDP came in a 0.1% the lowest growth figures in over five months.

The anticipated rate hike from the Bank of England (BOE) in May now seems to be off the cards which has been a catalyst for Sterling’s drop in value. We may not now see a rate hike until 2019.

Political uncertainty is also hitting the pound. Theresa May is facing criticism fro her stance on access to the customs union following Brexit, there is a distinct lack of unity and there has been rumours May could be ousted. Keep a close eye on developments as they unfold as this will have bearing on GBP/EUR.

Euro buyers – If you have to move short term move when interbank is above 1.14.

Euro sellers – There is potential for further gains , but be wary of being too optimistic, the pound is chronically undervalued and Brexit clarity will cause the pound to rally. Move in the low 1.12s if you like to gamble.

If you have a currency requirement I will be happy to assist. It is crucial to be in touch with an experienced broker if you wish to maximise your return. If you let me know the details of your trade I will endeavour to produce a free, no obligation trading strategy for you. If you have a trade to perform I will also happily provide a free quote and I am confident our rates are among the best in the industry. I would be willing to demonstrate this in form of a comparison with any competitor. You can trade in safety knowing you are dealing with company FCA registered and one that has been trading for 16yrs. Foreign Currency Direct PLC.

If you would like my assistance I can be contacted at dcj@currencies.co.uk. Thank you for reading. Daniel Johnson

 

Daniel Johnson