Sterling Still Under Pressure But Euro Data Next Week Could Reverse Things (Colm Gilhooly)

Pound to Euro Exchange Rate Ahead of UK Manufacturing and Services Data

The pound is still under pressure today after recent data and comment from the Bank of England suggest the UK is doing well, but not as well as some analysts had been pricing in.  Interest rate forecasts suggest UK rates will now go up in early 2015 and not by the end of this year as some had suggested and this has caused the pound to drop back over recent weeks.

However there is a lot of German economic data next week including unemployment figures.  Whilst the jobs data is expected to be good, the IFO surveys and inflation data could be a concern particularly as they could be a reflection of the wider European CPI to come out later in the week.  If this is also low it could put a lot of pressure on Mario Draghi to act as low inflation was one of the triggers for the ECB to cut interest rates recently.  This could take the form of some type of bond buying program similar to Quantitative Easing in the UK and the US, and this could substantially weaken the Euro so prepare for next week just in case!

Monday is a bank holiday here in the UK but if you would like to make a currency transfer and want to buy or sell euro, then feel free to get in touch by emailing Colm at cmg@currencies.co.uk and I would be happy to explain how we can help get you the best exchange rate.