Euro cheaper after GDP and inflation

16 May, 2014

Robin Haynes

The Eurozone’s economic problems were highlighted yesterday by poor GDP and inflation figures, leading to speculation that the European Central Bank could increase economic stimulus next month.

Good news for those of you buying Euros, the single currency remains weak, with GDP figures showing a disappointing 0.2% growth rate for the first 3 months of the year. Although the currency bloc has now grown for 4 quarters in a row, the lacklustre pace of growth is a worry, with France at 0%, Italy at -0.1% and only Germany showing a recovery similar to the UK’s at 0.8%.

Italy and France have unemployment rates in double figures, with Greece and Spain still having 1 in 4 of the workforce out of a job. Inflation figures were on track but that will do little to convince the world that the Eurozone is emerging from its dark days with any kind of sustainable momentum.

For those of you buying Euros we are still near the best rates seen this year, and many clients have been taking advantage this month by booking a rate now for their forthcoming Euro purchases.

A knock on effect has been that the US Dollar has strengthened this week, as the weaker Euro pushes investors’ money elsewhere. Rates for sending US Dollar abroad have fallen around 2c in the last 10 days.

Today we have the Eurozone trade balance at 10am, but no other data of note this side of the weekend.