Is it a good time to sell US Dollars and buy Euros?
As you can see from the graph, despite this recent downturn, we are still trading at very good levels.
Why has the US Dollar weakened against the Euro?
The US Dollar weakened again recently on the back of more inflation data. The inflation outlook declined significantly in July.
The central bank is still struggling to curb inflation, and the markets are still pricing in a significant chance of a 75 basis points Fed rate hike in September.
What to watch out for going forward?
Is it a good time to sell Pounds and buy Euros?
GBP/EUR is currently down 1.15% compared to last week. As you can see from the graph, despite this drop, GBP/EUR is still trading at good levels compared to the last few years.
What could cause the Pound to weaken further?
The UK’s latest GDP data on Friday could cause a significant movement. A huge 1.2% contraction has been forecasted by economists. This could really affect the Pound, especially considering the recent recession forecast.
Going forward, what could put pressure on the Pound?
Remember, pandemics, war, natural disasters, recessions, and political instability can cause rates to fluctuate dramatically.
What are your options?