Key Week Coming Up For Euro Exchange Rates

The Euro has made some gains against the pound so far this week, in part I think due to a lack of UK data to provide any support to sterling’s recent high.  We still have German retail figures out for Friday and this could help in the short term, but it looks as though most market attention is firmly on next week.  We have inflation on Tuesday, GDP on Wednesday, and the much anticipated ECB interest rate decision on Thursday.  Markets have already partially priced in some form of ECB intervention hence the recent Euro weakness, however it has by no means found its lowest levels yet.  If inflation is low, and the ECB do move to either cut interest rates, or look at some kind of extraordinary bond buying program the single currency could drop much further still.  To this end if I were holding Euros I would be tempted to cash in on the recent small improvement and get rid of them.

We have seen the USD make headway against the Euro this week again largely due to the pricing in of the possibility of ECB action, and US GDP revisions today certainly didn’t harm exchange rates.  However we also have US Manufacturing PMI data out next week as well as non-farm payroll so we are likely to see a lot of movement for this currency pair in the week ahead.  If you do have a transfer requirement and would like to see what we can save you on your exchange rate compared with your bank, then feel free to email Colm at cmg@currenices.co.uk and I would be happy to help.