This morning saw GBP/EUR rates fall below 1.39 as a result of poor growth figures released for the UK economy this morning.
Analysts were already expecting a reduction in growth rates due to the recent slowdown in the construction sector for the UK economy, but the fall was expected to be slight due to the beneficial effects of the Rugby World Cup on the UK economy.
However, despite the influx of tourists and increased revenue from the tournament, UK GDP fell even further than expected. Growth for the year is now forecasted to be 2.3%, much lower than last years 3% rise.
Sterling weakened off the back of this news by more than half a cent on GBP/EUR rates, and is still moving downwards with North American markets reacting to the news poorly once their morning trading began.
As such I would not be surprised to see markets on GBP/EUR move down to 1.37 by tomorrow morning, with rates already down to 1.384.
German unemployment data to be released on Thursday is the next significant event to affect GBP/EUR rates. The German economy has been posting some surprisingly positive data recently concerning business and investment conditions, despite the problems caused by the recent scandal over at Volkswagen.
This has mainly been attributed to the competitive nature of European exports thanks to the cheapness of the Euro, which is allowing sectors outside the automobile industry to thrive. Expectations are for a positive change in German unemployment, which should translate into further Euro strength this week, continuing the slide on GBP/EUR rates of exchange.
It seems that this week has overwhelmingly moved the risk appetite for markets heavily against those looking to buy Euros.
I strongly suggest that anyone with a Euro purchase requirement should contact me on 01494 787 478 and ask the reception for Joshua to discuss a strategy on your transfer to discuss the commercial rates of exchange I offer to maximise your Euro return.
We are still more than 4 cents better off than we were at the start of the month, so a popular option at the moment is to ‘fix’ a favourable rate of exchange until your Euros are required at a later date, even next year. This has no additional cost and I can explain the process if you know you will have a euro requirement in the future, possibly to complete on an overseas property – [email protected]