IS THIS THE BEST TIME TO CONVERT EUROS TO POUNDS?
Overall the Euro has gained against the Pound since the beginning of 2016 – very good news for clients looking to converting Euros to Pounds.
This report will address the factors that are likely to affect Euro exchange rates this week if you are buying abroad or making a currency transfer.
RECENT IMPROVEMENT FOR THE EUR SHOULD BE TAKEN ADVANTAGE OF
The Euro (EUR) continued its march last week and despite a small fight back from Sterling, the general trend since the turn of the year has certainly been positive for those converting Euros to Pounds. We’ve discussed at length the reasoning behind the recent EUR improvement but the key question now is whether this trend will continue, or has the EUR reached its limit in the short-term?
As I’ve mentioned I now expect the Pound to find support around 1.30. Although we did see this level breached last week, it wasn’t sustainable under current market conditions and the Pound bounced back almost instantaneously. The current range indicates that the GBP/EUR exchange rate may be finding its level and I wouldn’t be surprised if 1.30 becomes the benchmark for GBP/EUR over the coming months.
Looking at the Eurozone and despite an improvement in their economic output, we are not witnessing anything ground-breaking in terms of a leap forward. The current trend on GBP/EUR indicates a lack of confidence in the UK economy, not an overriding feeling that the Eurozone has solved all of its fiscal problems. Inflation levels remain a concern and as we can see on EUR/USD, the single currency is still struggling to make any serious impact.
There is little data of note for the Eurozone this week, so tomorrows Consumer & Industrial figures are likely to dominate headlines. Both are expected to show a negative reading, which could in turn put pressure on the single currency.