Will the Euro Continue to Gain Strength Over the Pound and US Dollar?

Will the Euro Continue to Gain Strength Over the Pound and US Dollar?

Euro exchange rates have had a positive week against most major currencies, with the most notable movement being against the U.S Dollar, current interbank exchange rates are up around 1.19 which is a 2 year high.

The EUR/USD exchange rate has move roughly 3% in favour of the Euro over the course of the trading week, following on from a strong week prior to that. It seems that the Dollar and indeed the U.S as a whole is starting to lose (albeit likely temporarily) its safer haven status and investors are making their move to seek a more comfortable area to place their money.

With major issues surrounding Covid-19 and what is set to be a tremendous economic hangover to come over in the States it is no surprise to see that the Dollar is struggling, throw into the mix that there is an election still due to go ahead in early November and not only do you have economic uncertainty but also political instability, two of the key factors than can impact the value of a currency.

So with all of the above in mind we have seen a large shift of money coming out of the Dollar and heading into the Euro, thus making the Euro more in demand and generally raising its value against most major currencies, we have seen a 3% shift against USD, a 1% gain against AUD, a 2% gain against CAD and a fairly flat market against GBP.

It does seem like both EUR and GBP are battling it out to take the flow at present, which is probably why EUR/GBP has remained fairly steady. Looking at the pound it does become quite an attractive offer if moving out of the USD.

Historically the rate shows that Sterling is still extremely cheap to buy into with USD, and with a possible Brexit deal on the horizon now could be the time for investors to place themselves and you would imagine that if a deal is agreed the pound may soar and could have a lot of value to gain.

This may also have quite an impact on EUR/GBP in the month ahead, the general expectation is that a deal could be agreed and is likely to be agreed in the next two months, this news may significantly strengthen the pound, so if you are currently sat on Euros from a property sale it may be prudent to keep a very close eye on developments in the weeks ahead.

Economic Data Today

Today we have the release of Growth figures across the Eurozone which will be key for how Euro exchange rates finish off the week, expectations are for a double digit decline for Q2 of 2020 which in normal terms would be extremely negative however in current market conditions it seems like bad news isn’t having such a big impact on exchange rates.

Of course should these figures be a lot different to those that analysts had predicted then we could see some volatility in early morning trading.

Today is the last trading day of the month and this could mean that we see significant volumes of currency moving around and this is known as month end flows. For those readers that aren’t aware this can lead to quite sharp market movements which is mainly down to end of month flows.

End of month flows is where larger funds look to net off their positions for the month and also the quarter, so there can be very large currency transactions taking place which often move the market without any prior warning.

Currency Exchange to Carry Out in the Coming Weeks and Months?

If you have a currency exchange to carry out involving the Euro in the days, weeks or months ahead, then it would be well worth you contacting us here at pound sterling forecast so that we can be of assistance to you.

You may already be set up with a brokerage, but I would like to think that our level of service and proactiveness may add great value to you along with our competitive exchange rates too.
For the sake of taking a few minutes to fill in the form below it could potentially lead to more for your money in terms of assistance with the timing of your transfer with consistent information and also more for your money.