GBP/EUR exchange rates now should be best for remainder of 2015 (Joshua Privett)

GBP/EUR exchange rates have cannoned up by 10 cents in just over a month. In the middle of October buyers will remember that the mid-market on Euro purchasing was around 1.33 for those holding Sterling.

The main driver of this rally for GBP/EUR has actually been as an after-effect for movements on USD/EUR currency exchange rates.

The USD/EUR is the most heavily trading currency pair in the world by volume. As such when one strengthens significantly, the opposite effect is recorded in its partner currency.

For the past month the US Dollar has been the clear winner on the currency markets, gaining value and investor interest by making more and more explicit hints for an interest rate hike in December. This will be the first such rise in a major economy since the recession, which explains the severe gains for the Dollar and the equally strong losses for the Euro.

GBP/EUR has gained 10 cents as more recent news continues to instill greater certainty of a rate hike in the near term. However, a resistance level has since been hit at around 1.43 which has been hard to stay above for long.

In fact, the markets had seemed to be heading back down in the other direction last week, and it is hard to gauge just how much the recent attacks in Paris have been keeping further pressure down on Euro value.

Those with Euros to buy have to come to terms with the fact their their transfer hinges entirely on events in the US. The FED stated recently that ‘barring any unexpected changes in the markets, a rate hike is on the table for December’. This is exactly what they said when a hike was expected in August, and before that in March. 

This time around a hike seems more likely, but buyers should be wary of gambling on this. It was this initial delay in August as a result of the uncertainty caused by China that caused GBP/EUR rates to drop to 1.34 from highs of 1.41 in the space of a week. In any case – it seems that rates will face difficulty stretching much further from this point even if all data and policy changes come out positively.

I strongly recommend that anyone with Euros to buy in the coming months should contact me on 01494 787 478 and ask the reception for Joshua to discuss a strategy to maximise any opportunities to present themselves between now and the final decision in December. I can supply a competitive quote on your exchange and have never had an issue beating rates offered elsewhere.

Those with Euros to sell can do the same, and if you have time to wait to ride any movements in your favour, I can explain your options to help you buy at the high of the market.


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