The Euro has started 2018 well with plenty of expectation and improved confidence that the European Central Bank (ECB) will be looking like they may raise their interest rate or possibly withdraw their Quantitative Easing (QE) program. Either measure or both in 2018 would see the Euro stronger and lay some foundation for further rises longer term.
However, that expectation might in practice not see the Euro stronger, it might actually see the Euro weaker. This is because the currency markets can sometimes price in good news for a currency and then if it is not quite as positive as expected, it can see the currency weaker. This happened very recently on the Euro when the ECB withdraw their stimulus and the Euro weakened, this was because it was not as hawkish (strong) a move, as the market had predicted.
The coming week will now see plenty of focus on the ECB when they meet next week as to what kind of developments in policy we can expect. Personally, I expect the Euro will remain on the weaker side since I think the market has read too much into the progress on economic policy that has been outlined. The ECB has been very cautious in their policy developments, I think this will continue as there is the Italian election in March and I doubt the ECB will want to do anything that unnecessarily triggers volatility.
The Euro remains at exceptionally strong levels against all currencies, if you have a transfer to make in the coming weeks then making plans in advance is wise. Leaving everything until the last minute and hoping for the best is not the best way to manage a currency transaction. For more information at no cost or obligation please speak to me Jonny on firstname.lastname@example.org.
Thank you for reading and I look forward to hearing from you.