The EUR continued to strengthen against GBP during Wednesday’s trading, following another busy day of economic data in the UK. This morning the Bank of England released their monthly minutes and despite no indication that their would be a further interest rate cut, talk of Quantitative Easing was high on the agenda. Whilst the decision was made not to introduce another round of QE imminently, many of the members agreed that it was ‘highly likely’ we would see further monetary stimulus over the coming months. In fact one member felt their was a strong case to introduce this immediately, a clear sign that leading decision makers believe that our economy is still very fragile and will need further support on its road to recovery.
This could have been a factor in today’s EUR strength and at time of writing the EUR was pushing to break back through the 1.24 barrier, after being closer to 1.25 at the start of the day. As I’ve alluded to in my previous blogs I always felt the Pound was over-valued against its euro counterpart, due to the deep rooted fiscal deficiencies in the eurozone and public perception regarding the region. Following Mario Draghi’s commitment to the long-term future of the single currency we have seen the EUR fight back and with UK retail sale figures expected to be down tomorrow, a move back towards 1.2350 could be on the cards.
This market uncertainty can be difficult to digest, especially if you have an upcoming property purchase or sale and are looking to transfer funds but are worried that market movements will ultimately leave you short changed. Here at Foreign Currency Direct plc we have multiple contract types all tailored specifically towards our clients needs. One of our most popular types is our forward contract, which allows you to lock in an exchange rate even if you do not have the full funds available. This is perfect for anyone looking to eliminate risk from the market but still take advantage of our award winning rates. If you would like more information please contact me directly at [email protected] or on 01494 787 478.