What to expect for Sterling vs Euro Rates next week (Tom Holian)

Sterling Euro exchange rates are potentially in for one of the biggest weeks of the year so far with a number of data releases to impact the currency pair.

On Tuesday the Eurozone publishes GDP data for the fourth quarter of 2015.

Although I think this could show some positive signs of growth the real risk for the Euro will come on Thursday when the European Central Bank looks at monetary policy.

The chances are that with Eurozone inflation running at just 0.1% the ECB could look at further Quantitative Easing with an addition of as much as EUR10bn per month.

My belief is that this is more likely to happen that another interest rate cut and with the rate at just 0.05% there is not much further room for them to move so QE is the more obvious choice.

When the ECB first launched QE this time last year Sterling Euro rates hit a 6 year high.

Although I don’t expect to see GBPEUR rates as high as they were this time 12 months ago I do think we could see gains for the Pound and to break above 1.30 again during the course of next week.

The UK releases the NIESR GDP estimate for the last three months and they are usually fairly accurate. The expectation is for 0.4% so anything different could cause volatility for Sterling Euro rates.

Overall I expect Sterling to rally vs the Euro towards the end of the week so if you need to buy Euros then perhaps wait to see what the ECB does on Thursday and be ready to act quickly.

If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian [email protected]