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GBP Hits 2-Week High Versus EUR, as ECB Signals Continued Low Rates

Market CommentaryGBP Hits 2-Week High Versus EUR, as ECB Signals Continued Low Rates
GBP Hits 2-Week High Versus EUR, as ECB Signals Continued Low Rates
Image credit: G Schouten de Jel.

Welcome to Pure FX's latest update of the pound to euro interbank exchange rate. This tells you when it's an excellent time to exchange pounds to euros, for your money transfer!

Sterling shoots up versus the common currency! The pound to euro interbank exchange rate has hit 1.1464 today, its highest in 2 weeks, or since May 30th.

If you intend to transfer money from the UK to the Eurozone, perhaps to emigrate or buy a property in Spain or France, it's hence currently the best time to do so this month. This is because you'll receive a much higher euro total.

The pound has jumped against the euro, because yesterday the European Central Bank (ECB) said that it will keep Eurozone interest rates low for longer, and cut its GDP growth outlook for the bloc for the next 3 years.

Euro Weakens, as ECB Signals Low Rates Until at Least Summer 2019

To be specific, even though the ECB announced that it will end its vast quantitative easing (QE) program in December, the bank also declared that it will keep interest rates in the bloc at all-time lows 0.0% until at least Summer 2019.

Also, the ECB cut its Eurozone growth outlook for 2018 by -0.3% to 2.1%, and forecast slower growth of 1.9% for 2019, and 1.7% for 2020.

Following the ECB's decision, central bank president Mario Draghi said at a press conference in Riga, Latvia that "We decided to keep the key ECB interest rates unchanged and we expect them to remain at their present levels at least through the summer of 2019 and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with our current expectations."

Euro Slides, as US Federal Reserve Hikes Borrowing Costs to 2.0%

This has weakened the euro, because when the Eurozone's central bank keeps interest rates lower for longer, this makes investing in the bloc less profitable for international money managers.

This is especially the case, because earlier this week America's central bank, the Federal Reserve, lifted interest rates up to 2.0%. This makes the US dollar a more attractive investment than the euro at present.

As a result, the pound to euro interbank exchange rate has hit this 2-week high, and could fly further!

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You’ll get an outstanding pound to euro exchange rate for your money transfer!

Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email peter.lavelle@purefx.co.uk.

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