Euro rates turn corner whilst USD hits brakes

20 March, 2015

Matthew Boyle

This week has seen a change of fortune amongst the majors with the Euro (EUR) seeming to have turned a corner whilst the Dollar (USD) seems to have hit the brakes amidst talk of delays from Yellen and the FED for the heavily anticipated Interest rate hikes.

Yesterday was a busy day in the market as we saw the fallout from Yellens comments Wednesday evening. Throughout the day’s trading we saw a slight change to recent trends – in the morning we saw the USD weaken whilst the Euro benefitted from some strength and gained against both – a mirror image of what we have seen in the past few weeks. In the afternoon however following some strong US employment data the USD started to gain again against GBP and EUR albeit not regaining the losses made following Yellens comments on the delay in interest rates.

In the short term then it would seem that despite some initial weakness in the USD it is still the strongest of the 3 majors, and whilst rates have slipped slightly USD selling rates remain extremely good. Take note however that the with the delay in a hike and also amidst warnings that this increase is market driven at the moment we may see in the near time USD weakness.

Interestingly in recent weeks USD/EUR has been the driving factor in the market and has had a huge impact on GBP>EUR rates. Whilst USD/EUR rates remain close to a 12 year high it would seem that much of the pressure on EUR has been lifted. Despite a small recovery in GBP>EUR rates this morning we are on course to witness the first weekly decline in rates for 7 weeks (and only the second time this year), and this is off the back of a 5 cent loss in almost as many days – something that has not happened since the recession.

Many analysts are now indicating a period of Euro strength as we see profit taking and a correction from the over inflated prices following the last 2 months flurry of buying. So take note those of you with imminent Euro requirements as we may well of seen the best we have in rates in the near-term.

Today the focus shifts to the other side of the world as we have RBA Governor Glenn Stevens speech and Canadian inflation data also.

Despite this however eyes will remain fixed on the Big 3 (GBP,EUR,USD) as with little data of note will provide a good indication of current market sentiment.

Should you have an upcoming currency requirement speak to your C.I broker today for some friendly and professional guidance on how to get the most out of your transfer and how you can protect current rates using a forward contract – a great tool to protect your purchase particularly if you are worried about rates moving the wrong way or are working to a tight budget.

Currency Index can help you stay well informed and well ahead of the market.