Sterling/Euro fails to hold above €1.43

The last week has been an interesting one for GBP/EUR exchange rates that have been range-bound between €1.42 and €1.43. We have seen the pair test the €1.43 mark several times, but each and every time it has failed to break through, so this could well be the peak:

This is the 5th time this year we’ve seen rates get to around these levels, and each and every time it’s dropped back away. In August when we hit these levels, within a week it had dropped back to €1.36 again. There is of course no way to predict which way the rate will go, however looking at past performance, any clients with Euros to buy may wish to take advantage of the current levels that are close to an 8 year high. It could go higher still of course, but fixing a rate now would allow you to budget and secure a very attractive exchange rate, and protect against a repeat of the trend we’ve seen several times this year when the rate snaps back to the mid €1.30’s. Many of our clients are choosing to make hay while the sun shines, and fix a rate on at least a portion of what they need to buy.

This morning European Central Bank Governor Mario Draghi gave a speech, in which he said that the Economy may need more aid if the recovery is not self-sustaining. This is yet another hint of loosening monetary policy or cutting interest rates next month, and the Euro has weakened further, pushing GBP/EUR to €1.43, but again the pair is hitting resistance at these levels, and failing to break through. In the UK we have Public Sector Borrowing figures, which show the UK deficit. If wider than expected Sterling could weaken.

Written by Adam Bobroff, Director, dedicated dealer for Allez-Français clients at The Foremost Currency Group

 

Contact Adam on +44 (0)1442 892060

Peter Elias at 19:20 Filed Under: Currency exchange, financial advice