GBP/EUR Rates Retract Following Sterling Spike (Matthew Vassallo)
GBP/EUR rates have retracted over the early part of the trading week, with the pair falling below 1.18 on the exchange.
The Pound had made a move through 1.20 in the early hours of Monday morning, following the Italian referendum result and Italian Prime Minister Matteo Renzi’s subsequent resignation. This caused investors to panic due to the political and potential negative economic effects this would have on the Eurozone and Sterling benefited as a result.
However, this positive momentum was short lived and the EUR has fought back, proving how fragile the UK economy remains in the eyes of investors. The EUR has benefited from a strong run of economic data, including better than expected Retail Sales figures.
We also saw their Gross Domestic Product (GDP) number come it at 1.7%, better than the expected 1.6% growth. This is such key release for an economy as it gives us a key insight into the current economic standing, as well as an insight into future growth prospects.
This combined has helped the single currency to bounce back against Sterling and with the current Supreme Court ruling on whether the UK can leave the EU without Article 50 being ratified by MP’s, expect further market uncertainty over the coming days and weeks.
Personally I wouldn’t be prepared to gamble on the current market. There are concerns over whether the European Central Bank’s (ECB) will extend their current monetary policy (QE) programme beyond its current deadline of March, at tomorrow’s policy meeting. If this does occur it could start to heap pressure back on the EUR, so today may be an opportune moment to execute and short-term EUR/GBP currency exchanges.
If you have an upcoming GBP or EUR currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.
If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on email@example.com