Last Thursday we saw GBPEUR rates fluctuate by 2% in one trading day. The European Central Bank confirmed they would be increasing the Quantitative Easing program by €20bn and cutting interest rates to 0% from 0.05%.
Initially GBPEUR broke through 1.30 however the Presidents comments shortly after turned the market upside down. Many believed Mario Draghi would have to take a dovish stance in regards to the economy where as actually it was quite the opposite. He went on to exclaim the ECB have done enough and not to expect further cuts to interest rates or additional stimulus.
We are set for another volatile week of trading and I expect GBPEUR rates to fall throughout the week.
Wednesday Chancellor George Osborn is set to give his latest budget. Two weeks ago he stated that the UK economy is not performing as well as first thought therefore future cuts may have to be made. In my eyes that meant he was warning us that cuts are going to occur this Wednesday. If cuts are made investors will not feel confident of leaving their assets within the UK therefore we could see a sell off of the Pound Wednesday (GBPEUR will therefore decrease.)
Thursday is the latest Interest Rate decision for the UK. The vote has been split 9-0 in favour of keeping Interest Rates on hold and I expect no change. Governor of the Bank of England Mark Carney will speak shortly after and his comments will dictate how GBPEUR finishes the week.
Im of the opinion if Osborn makes cuts and the Interest Rate decision is 9-0 he will take a dovish tone to the meeting and GBPEUR will drop further.
With all eyes on the ECB last week ‘Brexit’ talks seemed to be in the shadows. It doesn’t matter if you are a business owner buying, the local newsagent or a student that’s just finished 6th form, week by week the referendum is going to become the hot topic of your conversation. Many clients I speak to are exclaiming they just don’t know the facts and its going to be up to both camps to now try and put their case forward to the public.
The more we hear about the referendum in the weeks to come, I am no doubt volatility will rise which will weaken the Pound!
For Euro buyers last Thursday I believe was your window of opportunity. Many of my clients that wanted 1.30+ managed to achieve this figure due to the use of a ‘Limit Order’. This is why it’s so important when buying Euros to get in touch to discuss your options. If you went through your bank last week I would imagine you would have received around 1.25, a big difference!
If you are buying or selling Euros this year, I can give you economic information to help you time your transfer and can also offer you a better exchange rate than what you would receive with your bank and other brokerages. This can be anywhere between 1-5%. My direct email is firstname.lastname@example.org Dayle Littlejohn. Alternatively call me Monday morning on 0044 1494 787 478 and ask to be put through to Dayle Littlejohn.
If you are already using a brokerage I recommend emailing me with the exact figures and I will give you our live price so you can make a comparison. This will take you 2 minutes but could save you a considerable amount of money.