Eurozone Inflation Falls putting a stop to Euro Strength (Tom Holian)

Pound to Euro Rate: GBP Falls on Virus Fears and Manufacturing Data as EUR Rallies

Official figures out this morning showed a fall in Eurozone inflation in December to 0.8% down from 0.9% the month before. Inflation is a measure of the cost of living but more importantly has an impact on a central bank’s decision concerning interest rates.

With the ECB having cut interest rates recently this has led to Euro weakness and inflation falling could mean a rate cut is on the cards in Europe in order to increase consumer spending.

If interest rates are low this encourages people to spend rather than save with the main intention to increase growth which has also fallen across the Eurozone during 2013.

Sterling Euro exchange rates continue to trade above 1.20 and my feeling is that although we may see a few dips below during the course of this week I think longer term that we’ll see Sterling strengthen against the Euro breaking higher than levels currently available.

If you have a currency transfer to make and want to save money compared to using a bank please contact me directly Tom Holian [email protected]