The Euro has slipped as the ECB (European Central Bank) announced yesterday an extension in their QE (Quantitative Easing) program. Utilising the monetary policy wizardry that Mario Draghi and his team has unleashed on markets in the last few years, saw the Euro lose ground with GBPEUR rising to 1.1280 and EURUSD falling to 1.1630. For clients buying and selling Euros the big question is, will this weakness persist, or is it just a short term blip in what has been a very strong year for the Euro?
Politics could soon become more of a factor, the Catalonia situation was mentioned by Mario Draghi who claimed it was too early to tell what the exact risks from this situation would be. One thing for sure is that it is not just going to quickly die down and in the future it could cause more problems for the Euro and clients looking to buy or sell Euros.
With the Euro now testing fresh lows against the pound and US dollar I think there could be fresh weakness today as yesterday was the day traders selling off the Euro, today might see more of the longer term institutional investors selling off positions. For larger investors who represent multiple interests (eg pension funds) any big decisions on currency investments will require more than one person to give the transfer the green light.
I therefore would not be surprised to see further Euro weakness in the coming days and possibly weeks. This is all as investors are forced to adjust their positioning no the Euro, owing to these changes in sentiment and increased political risks.
If you have a transfer buying or selling Euros we have more key data due soon which is important, notably the Bank of England interest rate decision and also further information on the Eurozone and UK economy next week. To get notified of improvements and receive assistance with strategies to help maximise your transfer please speak to me Jonathan Watson by emailing firstname.lastname@example.org.
Thank you for reading and I look forward to hearing from you.