The Pound vs the Euro is now trading at its best rate to buy Euros in 3 weeks after a very positive week for the British economy and therefore Sterling exchange rates.
The Pound has been boosted by strong UK GDP figures for the third quarter which came out at 0.4% for the quarter compared to the expectation of 0.3%.
This has put more pressure on the Bank of England to look at hiking interest rates at next week’s latest monetary policy meeting. At the moment the chances of a rate hike are currently above 80% and with inflation way above target the central bank have almost been backed into a corner to raise rates next Thursday.
Arguably it could be suggested that the GBPEUR exchange rate has been priced in to next week’s decision and therefore part of the reason for Sterling strength. However, with the Catalan issue also causing uncertainty on the continent this is another reason for the recent bout of Euro weakness.
The European Central Bank have also announced a tapering of their current QE programme down to €30bn per month but the crucial news is that the ECB announced that they are a long way from raising interest rates which has also helped the Pound vs the Euro with rates touching almost 1.13 on the Interbank level.
If you’re in the process of buying or selling Euros but do not have the full availability of funds it may be worth buying your currency on a forward contract which allows you to fix an exchange rate for a future date for a small deposit.
If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency.
A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on [email protected] and I will endeavour to get back to you as I can.