Euro Pound Exchange Rate Report – 4th May 2010
May 4, 2010 Leave a comment
The past week has seen a slightly milder fluctuation in the GBP/EUR cross, with a rate for exchanging Sterling to Euro reaching a high of 1.16190 and a low of 1.14470. This means a 1.5% shift between the highs and lows of the week. To put this into monetary terms it would mean a difference of £3,440 on a £200k trade.
Sterling has seemingly been at the mercy of the media and its political opinion polls this week, as every time a hung parliament is published as looking more likely, Sterling seems to have lost strength. That said, the downgrading of Spain and Portugal’s credit ratings along with the now uninvestible status of Greece has weighed heavily on the Euro, balancing things out and actually allowing Sterling to remain in a position of power.
Previous talk of certain European countries being ‘on the chopping block’ for credit ratings is now coming to fruition, rumoured further downgradings and economic difficulties throughout Europe prophesising an ominous future for the Euro. Those looking to move their Euros back to Sterling may want to consider the downgrading situation in Europe and those looking to buy Euros must surely be watching the political situation in the UK closely, as the nearer we draw towards election day, the more realistic the chance of a hung parliament becomes and therefore a possible weakening of Sterling. For an up to date consultation of whether or not the market is in your favour, call your account manager at Foremost today.
The week ahead is quite thin on the ground for data releases, but Thursday will more than make up for a lack of releases with the UK General Election taking place and the ECB interest rate decision being released. These factors will undoubtedly have a huge influence on the currency markets.
The ECB Interest Rate Decision is announced by the European Central Bank. If the ECB is hawkish about the inflationary outlook of the economy and rises the interest rates it is positive, or bullish, for the Euro. Likewise, if the ECB has a dovish view on the European economy and keeps the ongoing interest rate, or cuts the interest rate it is seen as negative, or bearish.
With these impending data releases and the result of the UK general election ahead, an air of uncertainty once again encapsulates the market, the prospect of a new government or possible hung parliament in the UK holding a prominent position in the weeks influencing factors.
Those with impending purchases in the Eurozone might look to consider booking a Forward contract with the Foremost Currency Group. By placing a 10% deposit, clients can eliminate the risk of an unstable
GBP/EUR rate by locking in a price today for a transaction that will take place in the future, up to maximum of two years. With all of these factors in mind, it is of utmost importance to speak with your specialist account managers to ensure you know all of the options available to you , ensuring you can make the right decisions when it comes to exchanging your currency, please feel free to contact us for a free consultation.
If you have yet to open a trading facility to gain access to commercial rates of exchange click here to open a currency exchange account today.