GBPEUR rates have stayed steady today, the calm before the storm some say. This week the busiest days are yet to come with both European GDP figures tomorrow and the Key Interest Rate Decision both in Europe and the UK on Thursday. GDP figures are expected to show an improving picture for the single currency and make the euro more expensive to buy. Thursday’s Interest Decision in the UK and Europe will certainly make for an very interesting 120 minutes. Europe is expected to use the event as an opportunity to talk up the euro once again; expect comments around an improving picture, job creation and potentially over-night interest rate cuts. All this should make the euro more expensive still. The UK on the other hand is more of a wild card, there are people forecasting more QE to be announced. Personally I think it will be in July but it is a risk everyone should be aware of! The view is that as inflation falls in the UK more QE will be started in line with a suggestion from the International Monetary Fund (IMF) a few weeks ago.
Either way longer term many see more QE as a sure thing as the new governor of the Bank of England (BOE) changes the UK focus from Consumer to Export, weakening the pound as a result.
So what do you do if you have a currency transfer to make?
Well people buying the pound have been rubbing their hands of late, as there seems to be plenty of potential opportunities for a the price to get better towards the end of the week and beyond. Pound sellers and GBPEUR traders however have been struggling to find anything to pin their hopes on for rates to improve. It seems the general view is that if you have a GBPEUR trade; buy now, limit your exposure or manage your risk. Personally I carry that same view so would suggest if you are in that situation to follow suit.
Longer term there was an interesting article in the papers over the weekend suggesting that the pound could lose 15% this year! This I think is someone making a name for themselves however a 5% drop is a lot more probable if the changes in the BOE policy are confirmed. This would make rates drop down towards the 1.10’s and would add £7,000 on a €150,000 purchase!!!!
If you would like information about how this could affect you please feel free to contact us. Our award winning service has helped people save money for over 12 years and I am confident we can save you some money. Simply email me, Steve Eakins at [email protected] for more information.
Look forward to hearing from you.