Pound drops against the Euro

3 June, 2015

Robin Haynes

The Pound seemed to be disappearing faster than the FIFA executive committee yesterday, after a string of positive news for the single currency bloc sent the Euro up in price, causing GBP-EUR rates to drop nearly 2c through the day’s trading.

Eurozone inflation figures, released in the morning, showed that annual inflation was up to 0.3%, ending a dangerous period of stagnant prices and igniting hopes that the economic recovery in Europe may not be stalling too badly. This was followed by Greek PM Alexis Tsipras announcing that he had issued a “realistic plan” for Greece to its international creditors, designed to release €7.2bn in desperately needed bailout funds. The Greeks have been talking up their proposals and markets seem to be listening, but it remains to be seen what the ‘troika’ of creditors will say, and whether Greece will come up with its scheduled €300m interest payment, due to the IMF on Friday.

German unemployment also fell to a 24-yaer low, with a survey showing Germans are currently more optimistic than at any point since 2001. No wonder that the single currency had a good day, dashing hopes for those of you waiting to send a payment in Euros – but beware that a Greek debt deal would very likely make the Euro significantly more expensive still.

Today’s currency news

The announcements continue today, and again it’s Europe in the headlines. The 6-weekly ECB interest rate decision and press conference take place at lunch time, with ECB President Mario Draghi’s speech always likely to be a market-mover. Eurozone retail sales and unemployment are also released this morning. For those of you looking to send US Dollars abroad, the rate has been improving a little in recent days, and we have some US sector-specific figures out this afternoon. The back end of the week is also full of economic news, so whatever your currency requirements do give us a call at Currency Index to talk through your options.