Euro Pound Exchange Rate Report – 4th October 2010
October 4, 2010 Leave a comment
Once again the GBP/Euro pairing was volatile this week with highs reaching 1.1807, lows of 1.1509 and an average exchange rate of 1.1686. This equates to a difference of 2.59% between high and low leading to a difference of €6,475 on an exchange worth €250,000.
Last week saw the publication of UK GDP data which temporarily caused a positive shift in the value of Sterling. This was short lived and the value of the Pound against the Euro dropped off towards the end of the week.
Sterling has been relatively strong against the other major currencies this week leading analysts to speculate that it is primarily Euro strength which is causing the movement. The value of the Euro has managed to rise even in the wake of the increased bailout of Anglo Irish Bank and the downgrading of Spain’s credit rating.
Looking to the week ahead the Euro could strengthen further on the back of the announcement of Germany’s Purchasing Manager Index (Manufacturing) which is expected to be bullish. The PMIM measures the level of goods manufactured in the Eurozone’s strongest economy and therefore indicates consumer purchases and German trade levels. To protect yourself against negative market movements speak to your Currency Broker about the benefits of forward contracts as a way of safeguarding a rate of exchange.
On Thursday the BoE announces its interest rate decision. A Hawkish outlook from the Bank and a rate rise would be positive for the value of Sterling. However it is important to note that the BoE have not indicated a rate rise and dovish comments could see GBP lose more ground to the Euro.
These factors emphasise the importance and necessity to remain in close contact with your currency broker, as, evidently the market will remain volatile as the week progresses. The smallest change in exchange rates can lead to huge differences in transactions, so utilising the knowledge and professionalism of a currency broker can help to save you thousands of Pounds.
If you have yet to open a trading facility to gain access to commercial rates of exchange click here to open an exchange rate account today.