The tone on GBPEUR has changed. When is a good time to buy Euros?

The Pound Continues Its Fightback

The last few weeks has seen the rate be driven primarily by headlines surrounding Spain. But in the last couple of weeks the rate which had reached 1.2890 does now appear to have hit a peak and the tone has changed, as we here at www.gbpeuroforecast.co.uk predicted.

Previously GBPEUR seemed alsmot immune to any negative sterling data. When it was announced earlier in the year the UK had entered the dreaded double dip, we saw hardly any movement on GBPEUR. Indeed the ongoing prospect of more QE and a rate cut for the UK had done little to dent confidence for sterling. The tone has now changed and part of the reason sterling has dipped against the Euro is because of the UK now being in a much deeper recession than thought (with three consecutive quarters of negative growth) and Manufacturing PMI showing the biggest monthly drop in over three years!

‘Mario did disappoint. But he also made clear that the Euro is irreversible and affirmed the ECB’s commitment to the Euro. With A German constitutional court ruling still outstanding on the legality of ECB bond buying mechanisms, there were limitations to what we could have expected and moving forward we are bound to see more Euro positive annoucements.’

With the focus back on the dire economic conditions in the UK, sterling (which has bombed against all the majors) looks unlikely to be capitalising on the Euro anytime soon. And yesterday’s news that Mario and the ECB will be looking at more bond buying options in the future should limit major further Euro weakness. Mario did disappoint. But he also made clear that the Euro is irreversible and affirmed the ECB’s commitment to the Euro. With A German constitutional court ruling still outstanding on the legality of ECB bond buying mechanisms, there were limitations to what we could have expected and moving forward we are bound to see more Euro positive annoucements.

All in all I expect the Euro to become more expsnsive to buy in the coming weeks with sterling. If selling or buying Euros you can speak to me to find out all of your options and receive assistance with the actual timing of your exchange. Please contact me Jonathan on [email protected] or call 01494 787 478.