GBPEUR exchange rates hit their highest level seen since January 2013 on Tuesday in the higher end of the 1.23 level but have dropped since following some stronger news from the Eurozone.
It appears as though the recent fall has also been fueled by speculators who have taken advantage of the recent highs and are profit-taking in the short term.
Next week sees the release of the Bank of England interest rate decision as well as the decision for the European Central Bank. There are expectations that the ECB may look to either cut interest rates from their historic low of 0.25% or look at using Quantitative Easing as a tool to stop inflation from falling from its recent worrying lows.
Typically, if a central bank cuts interest rates or uses QE this often will lead to that particular currency experiencing a bout of weakness. However, it could also be argued that the reason why Sterling has been trading so high against the single currency is because of rumours that something might happen next week.
Sterling Euro exchange rates have fallen marginally this week but generally speaking have not moved by that much owing to the expected volatility next week.
On Monday the Eurozone will publish Manufacturing data. The expectation is for 52.5 so anything higher could see a small amount of Euro strength.
If you’re worried about the recent movements on exchange rates and want to save money on exchange rates compared to using your bank then contact me directly Tom Holian [email protected]