The pound to Euro exchange rate has risen to 1.1462 at its highest this afternoon as a fresh move lower on EURUSD exchange rates drags the Euro lower against all the majors. The pair was given a nice boost this morning as UK Retail Sales took us from 1.1320 at the opening lows, higher to hit 1.137 as recent concerns over UK economic data cooled.
This afternoon was the big mover with Mario Draghi and the ECB (European Central Bank) providing the final lift and seeing GBPEUR quickly rise over 1.14, it never looked like getting back under this level once breached. The main trigger for this move was news the ECB would seek to its stimulus program in December and an extension of the timing of when the ECB might be looking to raise interest rates.
The general impression will be of a weaker Euro as there are many risks to growth and also politics in the Eurozone, this namely stems from the political situation in Italy which might well further undermine the confidence in the region. Investors are concerned about the longer term outlook and are questioning the likelihood of the ECB actually being able to fulfil these high expectations.
The pound to Euro rate might well drive further, rising above 1.15 is now a very real prospect but clients looking to buy Euros at a higher price would probably be best to make some careful plans since rates can change very quickly!
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