In recent weeks the US dollar has gained the momentum against the euro and according to ING group they believe exchange rates could reach parity before the turn of the year. On Thursday the Euro reached fresh lows against the dollar when exchange rates reached 1.0364.
Dollar strength in line with Euro weakness is the reason why exchange rates have dropped. The Federal Reserve raised interest rates from 0.5% to 0.75% and have claimed its likely the FED will raise rates 3 times throughout 2017.
The ECB have announced they will be extending the Quantitative Easing program and therefore will be injecting another 540 billion euros into the economy. The theory behind Q.E is that more euros in circulation causes the euro to devalue however in the longer term it should help growth.
As you would expect the euro has also been devaluing against sterling. Since the start of November GBPEUR exchange rates have improved from 1.1060 to 1.1950. Therefore a €200,000 purchase is now £13,467 cheaper.
If investors continue to leave the euro and flock to the US dollar I would expect to see GBPEUR exchange rates continue to improve and float above 1.20 by the end of the year. However early next year the Supreme Court ruling could put pressure on the pound therefore if I had euros to buy within the next 3 months I wouldn’t take the risk and I would purchase upfront.
If you are buying or selling Euros in the upcoming months and are looking to achieve competitive rates of exchange whilst receiving regular economic information feel free to email me the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with the options available to you along with the process of converting currency. My direct email address is email@example.com and I look forward to receiving your email.