Sterling Euro exchange rates have remained at their 16 month high hit yesterday. UK Retail Sales were the best in 10 years which led to Sterling trading higher against the single currency during yesterday’s trading session.
This morning Q1 UK GDP figures for the 2nd revision came in as expected which stopped the Pound from falling as at the same time UK Public Sector Net Borrowing went from £6bn to £9bn. Generally speaking over the last few months UK data has been very strong.
With British unemployment the lowest level in 5 years at below 7% and inflation under control according to the Bank of England things seem quite rosy for the economy.
In the Eurozone however things are rather unstable. With inflation worryingly low the ECB may be forced soon to either cut interest rates (which is unlikely) or use Quantitative Easing as a tool to combat inflation from falling further.
The real problem is that if inflation is too low this has a huge impact of growth prospects which in turn is likely to weaken the currency involved.
German GDP is due tomorrow morning at 7am and this is likely to provide some volatility for Sterling Euro exchange rates during early morning trading tomorrow. The expectation is for growth of 2.3%.
As Germany is the largest economy in the Eurozone this is an important set of data as it will provide a guide as to what will happen to Euro rates in the short term.
If you have a currency transfer to make and want to save money on exchange rates compared to using your bank then contact me directly Tom Holian email@example.com