12th April 2024
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Spotlight: Protect your money from the volatility that plagued GBP/EUR in July

The Pound/Euro exchange rate witnessed some dramatic swings in July. GBP/EUR struck both a nine-month high and a six-week low in the span of just a few days.

Fortunately the experts at Currencies Direct are here to help you make sense of what happened to the GBP/EUR exchange rate and what steps you can take to protect your money from further volatility.   

What’s been happening?

The pound traded in a wide range over the past few weeks, climbing to new multi-month highs in the first half of July, before suffering a swift fall from grace later in the month.

Sterling was initially underpinned in July by Bank of England (BoE) interest rate expectations, with GBP/EUR rocketing to a nine-month high as record UK wage growth bolstered expectations that the bank would deliver another oversized rate hike in August.

In contrast the Euro struggled in early July in the face of underwhelming Eurozone economic data.

Sterling came crashing back to earth as we entered the second half of July. A larger-than-expected drop in UK inflation upended rate hike bets, with GBP/EUR plummeting to a six-week low amid speculation that UK interest rates will now peak below 6%.

The Euro was well positioned to capitalise on the Pound’s weakness, as an upwardly revised Eurozone inflation print strengthened European Central Bank (ECB) rate bets.

However, this resulted in disappointment following the ECB’s interest rate decision at the end of July. Although the bank raised interest rates in line with expectations, policymakers signalled that this may mark the end of its current hiking cycle.

So far in August the GBP/EUR exchange rate has come under renewed pressure after the BoE’s rate decision proved more dovish than expected.

The month ahead

Looking ahead, it’s likely that movement in the Pound/Euro exchange rate will remain highly changeable in the coming weeks. Upcoming economic releases could act as a key source of volatility.

GBP investors will be keeping a close eye on UK data as they seek to better gauge how high UK interest rates will reach. The UK’s upcoming GDP figures being a particular focus as continued signs of resilience could bolster BoE rate hike bets.

Meanwhile, EUR investors will be wary of more underwhelming Eurozone data. Weak PMI releases and softening inflation would further erode the chances of additional ECB interest rate hikes and weigh on the Euro.

Navigating currency volatility

When moving money to and from Spain, the value of your transfer will be largely dependent on what is happening in the currency market.

If you are moving money to Spain you will benefit from a weak Euro, while anyone repatriating funds will want EUR exchange rates to be stronger. While the difference may only be a few cents, this can make a bit difference when transferring larger amounts.

However, as the currency market is highly volatile it can be extremely difficult to judge when it will be most favourable for you to make a transfer. This is particularly true when moving money through a bank as you will only be able to make a transfer at the current exchange rate.

How can Currencies Direct Help?

Currencies Direct offers excellent exchange rates, expert support, and a range of transfer options. We also have an exclusive deal with CaixaBank which means you’ll never pay receiving charges in any Spanish bank.

Our dedicated currency experts are on hand to keep you up-to-date with the latest market movements, giving you all the insights you need to time your transfers effectively.

Currencies Direct is also fully licensed to operate as a currency provider within the EU. So you know your money is always covered by the relevant authority.

Pop into your local branch and speak to one of our friendly currency brokers to see how much we could help you save when transferring funds to and from Spain.

About Currencies Direct

Currencies Direct have been helping individuals and businesses save time and money since 1996 with excellent exchange rates and no transfer fees.

With a team of over 550 currency experts and 20+ branches across Spain, Currencies Direct are never far away when you need them.

They’ll keep you up to date with the latest market movements so you can pick the right time to move your money. They also offer a range of specialist services that can be tailored to your individual requirements.

If you have a currency requirement coming up, get a quote now to find out how much you could save.

This a Spotlight Advertising Feature in collaboration with Currencies Direct.

ALSO READ: Spotlight: Three tips to save you money when making a currency transfer to Spain.

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