GBPEUR rates now sit at a near 18 month low making the euro an expensive and valuable asset. Unfortunately, however, it is continuing to make clients that need to buy the currency pay more and more. The reason for the slide this week has been steps forward by Europe and also from news in the US. The situation in Italy is also a key factor for exchange rates, and this could continue for the next couple of weeks. The reason why is, not just their lack of government, but also the fact that a majority of voters voted for Governments against austerity in the Eurozone’s third largest economy. This risk that their budget cuts will stop adds a real risk that others may follow and so has re-ignited the debt crisis across the single currency. This was the main reason why the GBP/EUR reached a 3 week high on Wednesday. Now, however, steps have been made to hopefully avoid another election which has helped add value to the euro making it more expensive to buy.
The other key factor is that US weakness has created euro strength as money flows into the single currency from the states. This additional demand has made the euro more expensive to buy. This is another example of how the markets can be affected by unforeseen circumstances. (A currency broker will try and help you avoid these downturns and save you money on your exchange. Contact me for more information [email protected])
So what next for euro exchange rates?
I personally expect rates to continue to fall for GBPEUR making things increasingly more expensive from the weekly shop to a property or product purchase. However rates never move in a straight line so timing a trade well will make a difference. For example rates this week have seen moves in excess of 1.5 cents in the space of 4 hours, potentially saving you £2,000 on a €200,000 transfer.
Next week we have key data on Tuesday for the UK and Friday for Europe which may give opportunities for the quick thinking and those in a position to act.
If you are looking at moving money internationally and want to make sure you get the best price in this volatile market feel free to contact me on [email protected]